Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 3 years.
Correct Answer
$3696
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 4%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 3
= $3300 ×4/100 × 3
= 3300 × 4 × 3/100
= 13200 × 3/100
= 39600/100
= $396
Thus, Simple Interest = $396
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 + $396
= $3696
Thus, Amount to be paid = $3696 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) = 4%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 4% × 3)
= $3300 + ($3300 ×4/100 × 3)
= $3300 + (3300 × 4 × 3/100)
= $3300 + (13200 × 3/100)
= $3300 + (39600/100)
= $3300 + $396 = $3696
Thus, Amount (A) to be paid = $3696 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3300, the simple interest in 1 year
= 4/100 × 3300
= 4 × 3300/100
= 13200/100 = $132
Thus, simple interest for 1 year = $132
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $132 × 3 = $396
Thus, Simple Interest (SI) = $396
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $396
= $3696
Thus, Amount to be paid = $3696 Answer
Similar Questions
(1) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if William borrowed a sum of $5500 at 8% simple interest for 7 years.
(3) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 2% simple interest?
(4) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(5) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Jessica borrowed a sum of $5750 at 3% simple interest for 8 years.
(7) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(8) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8820 to clear the loan, then find the time period of the loan.
(9) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10317 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due if William borrowed a sum of $3500 at 7% simple interest for 4 years.