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) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8094 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 10% simple interest for 8 years.
(3) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.
(5) How much loan did Amanda borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7865 to clear it?
(6) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 4% simple interest.
(7) How much loan did Timothy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8510 to clear it?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 8 years.
(9) Christopher took a loan of $6000 at the rate of 7% simple interest per annum. If he paid an amount of $8520 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if David borrowed a sum of $5400 at 4% simple interest for 8 years.