Question:
What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 2% simple interest?
Correct Answer
$4144
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 6
= $3700 ×2/100 × 6
= 3700 × 2 × 6/100
= 7400 × 6/100
= 44400/100
= $444
Thus, Simple Interest = $444
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 + $444
= $4144
Thus, Amount to be paid = $4144 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3700 + ($3700 × 2% × 6)
= $3700 + ($3700 ×2/100 × 6)
= $3700 + (3700 × 2 × 6/100)
= $3700 + (7400 × 6/100)
= $3700 + (44400/100)
= $3700 + $444 = $4144
Thus, Amount (A) to be paid = $4144 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3700, the simple interest in 1 year
= 2/100 × 3700
= 2 × 3700/100
= 7400/100 = $74
Thus, simple interest for 1 year = $74
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $74 × 6 = $444
Thus, Simple Interest (SI) = $444
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $444
= $4144
Thus, Amount to be paid = $4144 Answer
Similar Questions
(1) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?
(2) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 7% simple interest?
(4) David took a loan of $4800 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(5) Kenneth had to pay $5300 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 5% simple interest for 4 years.
(8) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $10320 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 8% simple interest.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 7 years.