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) How much loan did Cynthia borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9937.5 to clear it?
(2) How much loan did Elizabeth borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5995 to clear it?
(3) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 3 years.
(5) Betty took a loan of $6500 at the rate of 7% simple interest per annum. If he paid an amount of $9685 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due if Robert borrowed a sum of $3100 at 6% simple interest for 3 years.
(7) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 6% simple interest.
(9) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?
(10) What amount will be due after 2 years if John borrowed a sum of $3100 at a 4% simple interest?