Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 3 years.
Correct Answer
$3498
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 2%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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) = $3300 × 2% × 3
= $3300 ×2/100 × 3
= 3300 × 2 × 3/100
= 6600 × 3/100
= 19800/100
= $198
Thus, Simple Interest = $198
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 = $3300 + $198
= $3498
Thus, Amount to be paid = $3498 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 = $3300
Rate of Simple Interest (SI) or (R) = 2%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 2% × 3)
= $3300 + ($3300 ×2/100 × 3)
= $3300 + (3300 × 2 × 3/100)
= $3300 + (6600 × 3/100)
= $3300 + (19800/100)
= $3300 + $198 = $3498
Thus, Amount (A) to be paid = $3498 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3300, the simple interest in 1 year
= 2/100 × 3300
= 2 × 3300/100
= 6600/100 = $66
Thus, simple interest for 1 year = $66
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $66 × 3 = $198
Thus, Simple Interest (SI) = $198
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $198
= $3498
Thus, Amount to be paid = $3498 Answer
Similar Questions
(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 5% simple interest?
(2) Ashley had to pay $4823 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Calculate the amount due if William borrowed a sum of $3500 at 8% simple interest for 4 years.
(4) How much loan did Amanda borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8937.5 to clear it?
(5) Michael took a loan of $4600 at the rate of 8% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.
(6) How much loan did Richard borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6720 to clear it?
(7) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 4 years.
(8) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(9) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6240 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 8% simple interest?