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) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(2) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.
(3) Calculate the amount due if Joseph borrowed a sum of $3700 at 7% simple interest for 4 years.
(4) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.
(5) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 8 years.
(6) Richard took a loan of $5200 at the rate of 8% simple interest per annum. If he paid an amount of $7696 to clear the loan, then find the time period of the loan.
(7) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(8) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 9% simple interest?
(9) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(10) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?