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) What amount does James have to pay after 5 years if he takes a loan of $3000 at 9% simple interest?
(2) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $12400 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 9% simple interest for 8 years.
(4) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 4% simple interest?
(5) In how much time a principal of $3200 will amount to $3680 at a simple interest of 5% per annum?
(6) Find the amount to be paid if Christopher borrowed a sum of $6000 at 4% simple interest for 8 years.
(7) Charles took a loan of $5800 at the rate of 10% simple interest per annum. If he paid an amount of $9860 to clear the loan, then find the time period of the loan.
(8) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9180 to clear it?
(9) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.
(10) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 3% simple interest?