Question:
( 3 of 10 ) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 7% simple interest?
(A) 11 19/46 days or 11.413 days
(B) 22 19/46 days or 22.413 days
(C) 46 days
(D) 23 days
You selected
$3700
Correct Answer
$4995
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 5
= $3700 ×7/100 × 5
= 3700 × 7 × 5/100
= 25900 × 5/100
= 129500/100
= $1295
Thus, Simple Interest = $1295
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 + $1295
= $4995
Thus, Amount to be paid = $4995 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) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3700 + ($3700 × 7% × 5)
= $3700 + ($3700 ×7/100 × 5)
= $3700 + (3700 × 7 × 5/100)
= $3700 + (25900 × 5/100)
= $3700 + (129500/100)
= $3700 + $1295 = $4995
Thus, Amount (A) to be paid = $4995 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3700, the simple interest in 1 year
= 7/100 × 3700
= 7 × 3700/100
= 25900/100 = $259
Thus, simple interest for 1 year = $259
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $259 × 5 = $1295
Thus, Simple Interest (SI) = $1295
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1295
= $4995
Thus, Amount to be paid = $4995 Answer
Similar Questions
(1) If Karen borrowed $3950 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(2) Calculate the amount due if David borrowed a sum of $3400 at 3% simple interest for 4 years.
(3) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 2% simple interest for 4 years.
(5) Elizabeth had to pay $3967.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(6) How much loan did Jessica borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6900 to clear it?
(7) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 4% simple interest.
(8) If Richard paid $3888 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 7% simple interest.
(10) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10281 to clear the loan, then find the time period of the loan.