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) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(2) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) In how much time a principal of $3100 will amount to $3286 at a simple interest of 2% per annum?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(5) What amount does William have to pay after 5 years if he takes a loan of $3500 at 6% simple interest?
(6) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 7% simple interest.
(7) What amount does James have to pay after 6 years if he takes a loan of $3000 at 6% simple interest?
(8) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(9) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $8288 to clear the loan, then find the time period of the loan.
(10) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.