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) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(2) If William paid $4060 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(4) How much loan did James borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6000 to clear it?
(5) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?
(7) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $7810 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if Charles borrowed a sum of $5900 at 9% simple interest for 8 years.
(9) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?