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) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
(2) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 6% simple interest?
(3) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(4) Charles took a loan of $5800 at the rate of 8% simple interest per annum. If he paid an amount of $8584 to clear the loan, then find the time period of the loan.
(5) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 9% simple interest?
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 2% simple interest?
(7) Robert took a loan of $4200 at the rate of 7% simple interest per annum. If he paid an amount of $6846 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3000 will amount to $3300 at a simple interest of 2% per annum?
(9) Calculate the amount due if David borrowed a sum of $3400 at 5% simple interest for 3 years.
(10) Karen took a loan of $5900 at the rate of 8% simple interest per annum. If he paid an amount of $10620 to clear the loan, then find the time period of the loan.