Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 4 years.
Correct Answer
$4224
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 4
= $3300 ×7/100 × 4
= 3300 × 7 × 4/100
= 23100 × 4/100
= 92400/100
= $924
Thus, Simple Interest = $924
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 + $924
= $4224
Thus, Amount to be paid = $4224 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) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 7% × 4)
= $3300 + ($3300 ×7/100 × 4)
= $3300 + (3300 × 7 × 4/100)
= $3300 + (23100 × 4/100)
= $3300 + (92400/100)
= $3300 + $924 = $4224
Thus, Amount (A) to be paid = $4224 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3300, the simple interest in 1 year
= 7/100 × 3300
= 7 × 3300/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $231 × 4 = $924
Thus, Simple Interest (SI) = $924
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $924
= $4224
Thus, Amount to be paid = $4224 Answer
Similar Questions
(1) Find the amount to be paid if Richard borrowed a sum of $5600 at 8% simple interest for 7 years.
(2) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 4% simple interest.
(3) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $11480 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 8% simple interest for 3 years.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 3% simple interest for 7 years.
(6) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(7) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(8) Calculate the amount due if John borrowed a sum of $3200 at 3% simple interest for 3 years.
(9) Lisa had to pay $4414.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.