Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 6% simple interest for 4 years.
Correct Answer
$4092
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 6%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 4
= $3300 ×6/100 × 4
= 3300 × 6 × 4/100
= 19800 × 4/100
= 79200/100
= $792
Thus, Simple Interest = $792
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 + $792
= $4092
Thus, Amount to be paid = $4092 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) = 6%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 6% × 4)
= $3300 + ($3300 ×6/100 × 4)
= $3300 + (3300 × 6 × 4/100)
= $3300 + (19800 × 4/100)
= $3300 + (79200/100)
= $3300 + $792 = $4092
Thus, Amount (A) to be paid = $4092 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3300, the simple interest in 1 year
= 6/100 × 3300
= 6 × 3300/100
= 19800/100 = $198
Thus, simple interest for 1 year = $198
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $198 × 4 = $792
Thus, Simple Interest (SI) = $792
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $792
= $4092
Thus, Amount to be paid = $4092 Answer
Similar Questions
(1) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 4 years.
(2) In how much time a principal of $3100 will amount to $3720 at a simple interest of 4% per annum?
(3) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 6% simple interest?
(4) Nancy took a loan of $6300 at the rate of 9% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(5) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(6) If Jessica paid $4050 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) What amount does John have to pay after 5 years if he takes a loan of $3200 at 10% simple interest?
(8) Find the amount to be paid if Thomas borrowed a sum of $5800 at 6% simple interest for 7 years.
(9) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(10) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.