Question:
What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 9% simple interest?
Correct Answer
$5365
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 9%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 5
= $3700 ×9/100 × 5
= 3700 × 9 × 5/100
= 33300 × 5/100
= 166500/100
= $1665
Thus, Simple Interest = $1665
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 + $1665
= $5365
Thus, Amount to be paid = $5365 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) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3700 + ($3700 × 9% × 5)
= $3700 + ($3700 ×9/100 × 5)
= $3700 + (3700 × 9 × 5/100)
= $3700 + (33300 × 5/100)
= $3700 + (166500/100)
= $3700 + $1665 = $5365
Thus, Amount (A) to be paid = $5365 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3700, the simple interest in 1 year
= 9/100 × 3700
= 9 × 3700/100
= 33300/100 = $333
Thus, simple interest for 1 year = $333
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $333 × 5 = $1665
Thus, Simple Interest (SI) = $1665
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1665
= $5365
Thus, Amount to be paid = $5365 Answer
Similar Questions
(1) How much loan did John borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5720 to clear it?
(2) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7952 to clear the loan, then find the time period of the loan.
(3) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 5% simple interest for 8 years.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 8 years.
(7) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8160 to clear the loan, then find the time period of the loan.
(8) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $9702 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(10) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.