Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 4% simple interest for 4 years.
Correct Answer
$3828
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 4%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 4
= $3300 ×4/100 × 4
= 3300 × 4 × 4/100
= 13200 × 4/100
= 52800/100
= $528
Thus, Simple Interest = $528
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 + $528
= $3828
Thus, Amount to be paid = $3828 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) = 4%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 4% × 4)
= $3300 + ($3300 ×4/100 × 4)
= $3300 + (3300 × 4 × 4/100)
= $3300 + (13200 × 4/100)
= $3300 + (52800/100)
= $3300 + $528 = $3828
Thus, Amount (A) to be paid = $3828 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3300, the simple interest in 1 year
= 4/100 × 3300
= 4 × 3300/100
= 13200/100 = $132
Thus, simple interest for 1 year = $132
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $132 × 4 = $528
Thus, Simple Interest (SI) = $528
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $528
= $3828
Thus, Amount to be paid = $3828 Answer
Similar Questions
(1) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(2) Find the amount to be paid if Thomas borrowed a sum of $5800 at 3% simple interest for 7 years.
(3) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 3% simple interest.
(4) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 6% simple interest?
(5) If James paid $3360 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) Calculate the amount due after 9 years if Robert borrowed a sum of $5100 at a rate of 7% simple interest.
(7) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 2% simple interest.
(8) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $9690 to clear the loan, then find the time period of the loan.
(10) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 8% simple interest?