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) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 3% simple interest.
(2) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 8 years.
(3) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 9% simple interest?
(4) In how much time a principal of $3200 will amount to $3392 at a simple interest of 3% per annum?
(5) How much loan did Margaret borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7937.5 to clear it?
(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 8% simple interest for 8 years.
(7) If Thomas paid $4560 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Find the amount to be paid if John borrowed a sum of $5200 at 5% simple interest for 8 years.
(9) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 9% simple interest for 8 years.
(10) Find the amount to be paid if Sarah borrowed a sum of $5850 at 7% simple interest for 7 years.