Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 3 years.
Correct Answer
$3894
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 6%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 3
= $3300 ×6/100 × 3
= 3300 × 6 × 3/100
= 19800 × 3/100
= 59400/100
= $594
Thus, Simple Interest = $594
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 + $594
= $3894
Thus, Amount to be paid = $3894 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) = 6%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 6% × 3)
= $3300 + ($3300 ×6/100 × 3)
= $3300 + (3300 × 6 × 3/100)
= $3300 + (19800 × 3/100)
= $3300 + (59400/100)
= $3300 + $594 = $3894
Thus, Amount (A) to be paid = $3894 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3300, the simple interest in 1 year
= 6/100 × 3300
= 6 × 3300/100
= 19800/100 = $198
Thus, simple interest for 1 year = $198
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $198 × 3 = $594
Thus, Simple Interest (SI) = $594
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $594
= $3894
Thus, Amount to be paid = $3894 Answer
Similar Questions
(1) In how much time a principal of $3000 will amount to $3600 at a simple interest of 4% per annum?
(2) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
(3) What amount does James have to pay after 5 years if he takes a loan of $3000 at 3% simple interest?
(4) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(5) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(6) How much loan did Donald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7800 to clear it?
(7) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $8640 to clear the loan, then find the time period of the loan.
(8) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 10% simple interest?
(9) How much loan did Donna borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7535 to clear it?
(10) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9562.5 to clear it?