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) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $10450 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Charles borrowed a sum of $3900 at 6% simple interest for 4 years.
(3) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(4) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(5) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6683 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if James borrowed a sum of $3000 at 8% simple interest for 4 years.
(7) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.
(8) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6812.5 to clear it?
(9) Calculate the amount due after 9 years if Jessica borrowed a sum of $5750 at a rate of 10% simple interest.
(10) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.