Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
Correct Answer
$3597
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 3%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 3
= $3300 ×3/100 × 3
= 3300 × 3 × 3/100
= 9900 × 3/100
= 29700/100
= $297
Thus, Simple Interest = $297
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 + $297
= $3597
Thus, Amount to be paid = $3597 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) = 3%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 3% × 3)
= $3300 + ($3300 ×3/100 × 3)
= $3300 + (3300 × 3 × 3/100)
= $3300 + (9900 × 3/100)
= $3300 + (29700/100)
= $3300 + $297 = $3597
Thus, Amount (A) to be paid = $3597 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3300, the simple interest in 1 year
= 3/100 × 3300
= 3 × 3300/100
= 9900/100 = $99
Thus, simple interest for 1 year = $99
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $99 × 3 = $297
Thus, Simple Interest (SI) = $297
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $297
= $3597
Thus, Amount to be paid = $3597 Answer
Similar Questions
(1) How much loan did Charles borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7080 to clear it?
(2) Find the amount to be paid if John borrowed a sum of $5200 at 6% simple interest for 7 years.
(3) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(4) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
(5) How much loan did David borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6750 to clear it?
(6) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $13300 to clear the loan, then find the time period of the loan.
(7) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 4% simple interest?
(8) How much loan did Andrew borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7480 to clear it?
(9) William took a loan of $5000 at the rate of 10% simple interest per annum. If he paid an amount of $8500 to clear the loan, then find the time period of the loan.
(10) What amount does Susan have to pay after 5 years if he takes a loan of $3650 at 8% simple interest?