Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 4 years.
Correct Answer
$3696
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 3%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 4
= $3300 ×3/100 × 4
= 3300 × 3 × 4/100
= 9900 × 4/100
= 39600/100
= $396
Thus, Simple Interest = $396
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 + $396
= $3696
Thus, Amount to be paid = $3696 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) = 3%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 3% × 4)
= $3300 + ($3300 ×3/100 × 4)
= $3300 + (3300 × 3 × 4/100)
= $3300 + (9900 × 4/100)
= $3300 + (39600/100)
= $3300 + $396 = $3696
Thus, Amount (A) to be paid = $3696 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3300, the simple interest in 1 year
= 3/100 × 3300
= 3 × 3300/100
= 9900/100 = $99
Thus, simple interest for 1 year = $99
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $99 × 4 = $396
Thus, Simple Interest (SI) = $396
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $396
= $3696
Thus, Amount to be paid = $3696 Answer
Similar Questions
(1) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 7% simple interest?
(2) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(3) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 7 years.
(4) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8944 to clear the loan, then find the time period of the loan.
(5) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(6) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 3% simple interest?
(7) What amount does James have to pay after 6 years if he takes a loan of $3000 at 3% simple interest?
(8) Find the amount to be paid if Robert borrowed a sum of $5100 at 2% simple interest for 8 years.
(9) How much loan did Matthew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $7750 to clear it?
(10) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.