Question:
What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 7% simple interest?
Correct Answer
$5254
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 6
= $3700 ×7/100 × 6
= 3700 × 7 × 6/100
= 25900 × 6/100
= 155400/100
= $1554
Thus, Simple Interest = $1554
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 + $1554
= $5254
Thus, Amount to be paid = $5254 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3700 + ($3700 × 7% × 6)
= $3700 + ($3700 ×7/100 × 6)
= $3700 + (3700 × 7 × 6/100)
= $3700 + (25900 × 6/100)
= $3700 + (155400/100)
= $3700 + $1554 = $5254
Thus, Amount (A) to be paid = $5254 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3700, the simple interest in 1 year
= 7/100 × 3700
= 7 × 3700/100
= 25900/100 = $259
Thus, simple interest for 1 year = $259
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $259 × 6 = $1554
Thus, Simple Interest (SI) = $1554
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1554
= $5254
Thus, Amount to be paid = $5254 Answer
Similar Questions
(1) If John borrowed $3200 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?
(3) Calculate the amount due if William borrowed a sum of $3500 at 3% simple interest for 4 years.
(4) What amount does William have to pay after 5 years if he takes a loan of $3500 at 2% simple interest?
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 6% simple interest?
(6) In how much time a principal of $3000 will amount to $3480 at a simple interest of 4% per annum?
(7) Calculate the amount due if Patricia borrowed a sum of $3150 at 4% simple interest for 3 years.
(8) Calculate the amount due if Susan borrowed a sum of $3650 at 10% simple interest for 4 years.
(9) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(10) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 2% simple interest.