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) Calculate the amount due if Jennifer borrowed a sum of $3250 at 10% simple interest for 4 years.
(2) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6864 to clear the loan, then find the time period of the loan.
(3) If Susan paid $4234 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
(5) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?
(6) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7052 to clear the loan, then find the time period of the loan.
(7) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(9) Calculate the amount due after 9 years if Susan borrowed a sum of $5650 at a rate of 7% simple interest.
(10) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.