Question:
What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 6% simple interest?
Correct Answer
$4810
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5
= $3700 ×6/100 × 5
= 3700 × 6 × 5/100
= 22200 × 5/100
= 111000/100
= $1110
Thus, Simple Interest = $1110
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 + $1110
= $4810
Thus, Amount to be paid = $4810 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3700 + ($3700 × 6% × 5)
= $3700 + ($3700 ×6/100 × 5)
= $3700 + (3700 × 6 × 5/100)
= $3700 + (22200 × 5/100)
= $3700 + (111000/100)
= $3700 + $1110 = $4810
Thus, Amount (A) to be paid = $4810 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3700, the simple interest in 1 year
= 6/100 × 3700
= 6 × 3700/100
= 22200/100 = $222
Thus, simple interest for 1 year = $222
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $222 × 5 = $1110
Thus, Simple Interest (SI) = $1110
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1110
= $4810
Thus, Amount to be paid = $4810 Answer
Similar Questions
(1) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8960 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if John borrowed a sum of $3200 at 10% simple interest for 4 years.
(3) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(4) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(5) How much loan did Lisa borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7562.5 to clear it?
(6) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $9440 to clear the loan, then find the time period of the loan.
(7) If Margaret paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(8) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 8 years.
(9) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(10) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.