Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 2% simple interest for 4 years.
Correct Answer
$3564
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 2%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 4
= $3300 ×2/100 × 4
= 3300 × 2 × 4/100
= 6600 × 4/100
= 26400/100
= $264
Thus, Simple Interest = $264
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 + $264
= $3564
Thus, Amount to be paid = $3564 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) = 2%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 2% × 4)
= $3300 + ($3300 ×2/100 × 4)
= $3300 + (3300 × 2 × 4/100)
= $3300 + (6600 × 4/100)
= $3300 + (26400/100)
= $3300 + $264 = $3564
Thus, Amount (A) to be paid = $3564 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3300, the simple interest in 1 year
= 2/100 × 3300
= 2 × 3300/100
= 6600/100 = $66
Thus, simple interest for 1 year = $66
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $66 × 4 = $264
Thus, Simple Interest (SI) = $264
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $264
= $3564
Thus, Amount to be paid = $3564 Answer
Similar Questions
(1) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6400 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Linda borrowed a sum of $3350 at 3% simple interest for 4 years.
(3) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $11970 to clear the loan, then find the time period of the loan.
(4) What amount does John have to pay after 6 years if he takes a loan of $3200 at 4% simple interest?
(5) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8930 to clear the loan, then find the time period of the loan.
(6) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(7) Jennifer took a loan of $4500 at the rate of 10% simple interest per annum. If he paid an amount of $8550 to clear the loan, then find the time period of the loan.
(8) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8313 to clear the loan, then find the time period of the loan.
(9) In how much time a principal of $3000 will amount to $3450 at a simple interest of 3% per annum?
(10) In how much time a principal of $3200 will amount to $3712 at a simple interest of 4% per annum?