Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 3 years.
Correct Answer
$3993
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 7%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 3
= $3300 ×7/100 × 3
= 3300 × 7 × 3/100
= 23100 × 3/100
= 69300/100
= $693
Thus, Simple Interest = $693
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 + $693
= $3993
Thus, Amount to be paid = $3993 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) = 7%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 7% × 3)
= $3300 + ($3300 ×7/100 × 3)
= $3300 + (3300 × 7 × 3/100)
= $3300 + (23100 × 3/100)
= $3300 + (69300/100)
= $3300 + $693 = $3993
Thus, Amount (A) to be paid = $3993 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3300, the simple interest in 1 year
= 7/100 × 3300
= 7 × 3300/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $231 × 3 = $693
Thus, Simple Interest (SI) = $693
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $693
= $3993
Thus, Amount to be paid = $3993 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.
(2) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 5% simple interest for 8 years.
(3) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(4) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $10758 to clear the loan, then find the time period of the loan.
(5) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 4% simple interest?
(6) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(7) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(8) In how much time a principal of $3150 will amount to $3528 at a simple interest of 4% per annum?
(9) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6674 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.