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) If Joshua paid $5292 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Karen took a loan of $5900 at the rate of 6% simple interest per annum. If he paid an amount of $8732 to clear the loan, then find the time period of the loan.
(3) Joseph took a loan of $5400 at the rate of 9% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(4) Mark took a loan of $6800 at the rate of 6% simple interest per annum. If he paid an amount of $10472 to clear the loan, then find the time period of the loan.
(5) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 3% simple interest?
(6) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(8) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
(9) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.
(10) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?