Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 3 years.
Correct Answer
$4191
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 9%
Time (t) = 3 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 3
= $3300 ×9/100 × 3
= 3300 × 9 × 3/100
= 29700 × 3/100
= 89100/100
= $891
Thus, Simple Interest = $891
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 + $891
= $4191
Thus, Amount to be paid = $4191 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) = 9%
And, Time (t) = 3 years
Thus, Amount (A)
= $3300 + ($3300 × 9% × 3)
= $3300 + ($3300 ×9/100 × 3)
= $3300 + (3300 × 9 × 3/100)
= $3300 + (29700 × 3/100)
= $3300 + (89100/100)
= $3300 + $891 = $4191
Thus, Amount (A) to be paid = $4191 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3300, the simple interest in 1 year
= 9/100 × 3300
= 9 × 3300/100
= 29700/100 = $297
Thus, simple interest for 1 year = $297
Therefore, simple interest for 3 years
= Simple interest for 1 year × 3
= $297 × 3 = $891
Thus, Simple Interest (SI) = $891
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $891
= $4191
Thus, Amount to be paid = $4191 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3100 will amount to $3720 at a simple interest of 5% per annum?
(3) Sarah had to pay $4312 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(4) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(5) Calculate the amount due if Christopher borrowed a sum of $4000 at 8% simple interest for 4 years.
(6) Mary had to pay $3416 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $12160 to clear the loan, then find the time period of the loan.
(8) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(9) How much loan did Donald borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8125 to clear it?
(10) If James paid $3480 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.