Question:
What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?
Correct Answer
$5698
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 9%
Time (t) = 6 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% × 6
= $3700 ×9/100 × 6
= 3700 × 9 × 6/100
= 33300 × 6/100
= 199800/100
= $1998
Thus, Simple Interest = $1998
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 + $1998
= $5698
Thus, Amount to be paid = $5698 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) = 6 years
Thus, Amount (A)
= $3700 + ($3700 × 9% × 6)
= $3700 + ($3700 ×9/100 × 6)
= $3700 + (3700 × 9 × 6/100)
= $3700 + (33300 × 6/100)
= $3700 + (199800/100)
= $3700 + $1998 = $5698
Thus, Amount (A) to be paid = $5698 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 6 years
= Simple interest for 1 year × 6
= $333 × 6 = $1998
Thus, Simple Interest (SI) = $1998
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $1998
= $5698
Thus, Amount to be paid = $5698 Answer
Similar Questions
(1) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(2) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $9348 to clear the loan, then find the time period of the loan.
(3) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $9310 to clear the loan, then find the time period of the loan.
(4) Susan took a loan of $5300 at the rate of 7% simple interest per annum. If he paid an amount of $7526 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Linda borrowed a sum of $3350 at 7% simple interest for 4 years.
(6) Christopher had to pay $4240 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Betty took a loan of $6500 at the rate of 6% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
(9) What amount does James have to pay after 5 years if he takes a loan of $3000 at 7% simple interest?
(10) Christopher took a loan of $6000 at the rate of 8% simple interest per annum. If he paid an amount of $9360 to clear the loan, then find the time period of the loan.