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 does David have to pay after 5 years if he takes a loan of $3400 at 8% simple interest?
(2) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(3) If Linda borrowed $3350 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) 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?
(5) How much loan did James borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5750 to clear it?
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 4% simple interest for 4 years.
(7) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.
(8) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 3% simple interest?
(9) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?
(10) Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.