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) Find the amount to be paid if Thomas borrowed a sum of $5800 at 8% simple interest for 8 years.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 4 years.
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 7% simple interest for 3 years.
(4) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $10664 to clear the loan, then find the time period of the loan.
(5) What amount does John have to pay after 6 years if he takes a loan of $3200 at 9% simple interest?
(6) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 4 years.
(8) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.
(10) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9116 to clear the loan, then find the time period of the loan.