Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
Correct Answer
$4884
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3700 × 8% × 4
= $3700 ×8/100 × 4
= 3700 × 8 × 4/100
= 29600 × 4/100
= 118400/100
= $1184
Thus, Simple Interest = $1184
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1184
= $4884
Thus, Amount to be paid = $4884 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3700
Rate of Simple Interest (SI) or (R) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 8% × 4)
= $3700 + ($3700 ×8/100 × 4)
= $3700 + (3700 × 8 × 4/100)
= $3700 + (29600 × 4/100)
= $3700 + (118400/100)
= $3700 + $1184 = $4884
Thus, Amount (A) to be paid = $4884 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3700, the simple interest in 1 year
= 8/100 × 3700
= 8 × 3700/100
= 29600/100 = $296
Thus, simple interest for 1 year = $296
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $296 × 4 = $1184
Thus, Simple Interest (SI) = $1184
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1184
= $4884
Thus, Amount to be paid = $4884 Answer
Similar Questions
(1) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9142.5 to clear it?
(2) What amount does James have to pay after 5 years if he takes a loan of $3000 at 5% simple interest?
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 10% simple interest.
(4) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 7% simple interest.
(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6256 to clear the loan, then find the time period of the loan.
(6) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.
(8) Calculate the amount due if Sarah borrowed a sum of $3850 at 2% simple interest for 4 years.
(9) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(10) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9088 to clear the loan, then find the time period of the loan.