Question:
( 1 of 10 ) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 4 years.
(A) 59
(B) 30.5
(C) 61
(D) 60
You selected
$3700
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) Barbara had to pay $4082.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 10% simple interest for 8 years.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 3 years.
(4) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 8% simple interest?
(5) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $11600 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 10% simple interest?
(7) Joseph took a loan of $5400 at the rate of 7% simple interest per annum. If he paid an amount of $8802 to clear the loan, then find the time period of the loan.
(8) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 2% simple interest.
(10) If Jennifer borrowed $3250 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.