Question:
What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 10% simple interest?
Correct Answer
$5920
Solution And Explanation
Solution
Given,
Principal (P) = $3700
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3700 ×10/100 × 6
= 3700 × 10 × 6/100
= 37000 × 6/100
= 222000/100
= $2220
Thus, Simple Interest = $2220
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 + $2220
= $5920
Thus, Amount to be paid = $5920 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3700 + ($3700 × 10% × 6)
= $3700 + ($3700 ×10/100 × 6)
= $3700 + (3700 × 10 × 6/100)
= $3700 + (37000 × 6/100)
= $3700 + (222000/100)
= $3700 + $2220 = $5920
Thus, Amount (A) to be paid = $5920 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3700, the simple interest in 1 year
= 10/100 × 3700
= 10 × 3700/100
= 37000/100 = $370
Thus, simple interest for 1 year = $370
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $370 × 6 = $2220
Thus, Simple Interest (SI) = $2220
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3700 + $2220
= $5920
Thus, Amount to be paid = $5920 Answer
Similar Questions
(1) Calculate the amount due if Robert borrowed a sum of $3100 at 5% simple interest for 4 years.
(2) Joshua had to pay $5341 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(3) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(4) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $10296 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 4 years.
(6) If Donna paid $5238 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 8 years.
(8) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 3% simple interest.
(9) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.
(10) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10608 to clear the loan, then find the time period of the loan.