Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
Correct Answer
$5032
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 4
= $3700 ×9/100 × 4
= 3700 × 9 × 4/100
= 33300 × 4/100
= 133200/100
= $1332
Thus, Simple Interest = $1332
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 + $1332
= $5032
Thus, Amount to be paid = $5032 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) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 9% × 4)
= $3700 + ($3700 ×9/100 × 4)
= $3700 + (3700 × 9 × 4/100)
= $3700 + (33300 × 4/100)
= $3700 + (133200/100)
= $3700 + $1332 = $5032
Thus, Amount (A) to be paid = $5032 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3700, the simple interest in 1 year
= 9/100 × 3700
= 9 × 3700/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $333 × 4 = $1332
Thus, Simple Interest (SI) = $1332
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1332
= $5032
Thus, Amount to be paid = $5032 Answer
Similar Questions
(1) What amount will be due after 2 years if Daniel borrowed a sum of $3550 at a 7% simple interest?
(2) Find the amount to be paid if Sarah borrowed a sum of $5850 at 2% simple interest for 8 years.
(3) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(4) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(5) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 8% simple interest for 3 years.
(7) In how much time a principal of $3200 will amount to $3584 at a simple interest of 3% per annum?
(8) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(9) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(10) How much loan did Sandra borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7740 to clear it?