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 Matthew borrowed a sum of $3600 at a 8% simple interest?
(2) If Betty paid $5100 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 9% simple interest for 8 years.
(5) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 3 years.
(6) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 3% simple interest?
(7) Sarah took a loan of $5700 at the rate of 7% simple interest per annum. If he paid an amount of $8493 to clear the loan, then find the time period of the loan.
(8) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 9% simple interest?
(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(10) How much loan did Ryan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9480 to clear it?