Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 5% simple interest for 4 years.
Correct Answer
$3960
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 5%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 4
= $3300 ×5/100 × 4
= 3300 × 5 × 4/100
= 16500 × 4/100
= 66000/100
= $660
Thus, Simple Interest = $660
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 + $660
= $3960
Thus, Amount to be paid = $3960 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) = 5%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 5% × 4)
= $3300 + ($3300 ×5/100 × 4)
= $3300 + (3300 × 5 × 4/100)
= $3300 + (16500 × 4/100)
= $3300 + (66000/100)
= $3300 + $660 = $3960
Thus, Amount (A) to be paid = $3960 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3300, the simple interest in 1 year
= 5/100 × 3300
= 5 × 3300/100
= 16500/100 = $165
Thus, simple interest for 1 year = $165
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $165 × 4 = $660
Thus, Simple Interest (SI) = $660
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $660
= $3960
Thus, Amount to be paid = $3960 Answer
Similar Questions
(1) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 7% simple interest?
(2) Donna had to pay $5577.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) If Patricia borrowed $3150 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 6% simple interest.
(5) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?
(6) Andrew had to pay $5520 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Find the amount to be paid if Jessica borrowed a sum of $5750 at 2% simple interest for 8 years.
(8) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9632 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 3 years.
(10) Calculate the amount due if John borrowed a sum of $3200 at 2% simple interest for 3 years.