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) Calculate the amount due if Mary borrowed a sum of $3050 at 3% simple interest for 3 years.
(2) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 7% simple interest?
(3) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 8 years.
(4) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $8480 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Mary borrowed a sum of $3050 at 2% simple interest for 4 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.
(8) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(9) How much loan did Emily borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7762.5 to clear it?
(10) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 3% simple interest?