Question:
Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
Correct Answer
$5180
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 4
= $3700 ×10/100 × 4
= 3700 × 10 × 4/100
= 37000 × 4/100
= 148000/100
= $1480
Thus, Simple Interest = $1480
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 + $1480
= $5180
Thus, Amount to be paid = $5180 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) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3700 + ($3700 × 10% × 4)
= $3700 + ($3700 ×10/100 × 4)
= $3700 + (3700 × 10 × 4/100)
= $3700 + (37000 × 4/100)
= $3700 + (148000/100)
= $3700 + $1480 = $5180
Thus, Amount (A) to be paid = $5180 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3700, the simple interest in 1 year
= 10/100 × 3700
= 10 × 3700/100
= 37000/100 = $370
Thus, simple interest for 1 year = $370
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $370 × 4 = $1480
Thus, Simple Interest (SI) = $1480
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1480
= $5180
Thus, Amount to be paid = $5180 Answer
Similar Questions
(1) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 8% simple interest?
(2) If Barbara paid $4118 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
(4) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 7% simple interest.
(5) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 6% simple interest?
(6) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
(7) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 10% simple interest?
(9) If Joseph paid $4144 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 9% simple interest for 7 years.