Question:
What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 3% simple interest?
Correct Answer
$4255
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5
= $3700 ×3/100 × 5
= 3700 × 3 × 5/100
= 11100 × 5/100
= 55500/100
= $555
Thus, Simple Interest = $555
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 + $555
= $4255
Thus, Amount to be paid = $4255 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) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3700 + ($3700 × 3% × 5)
= $3700 + ($3700 ×3/100 × 5)
= $3700 + (3700 × 3 × 5/100)
= $3700 + (11100 × 5/100)
= $3700 + (55500/100)
= $3700 + $555 = $4255
Thus, Amount (A) to be paid = $4255 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3700, the simple interest in 1 year
= 3/100 × 3700
= 3 × 3700/100
= 11100/100 = $111
Thus, simple interest for 1 year = $111
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $111 × 5 = $555
Thus, Simple Interest (SI) = $555
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $555
= $4255
Thus, Amount to be paid = $4255 Answer
Similar Questions
(1) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 4% simple interest.
(2) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(4) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 5% simple interest?
(5) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 6% simple interest for 7 years.
(6) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7396 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 5% simple interest?
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 6% simple interest.
(10) Calculate the amount due if Mary borrowed a sum of $3050 at 7% simple interest for 4 years.