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) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(2) Find the amount to be paid if William borrowed a sum of $5500 at 4% simple interest for 8 years.
(3) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 5% simple interest.
(4) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 4% simple interest.
(5) Calculate the amount due if John borrowed a sum of $3200 at 8% simple interest for 3 years.
(6) If David paid $4080 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) How much loan did Dorothy borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9062.5 to clear it?
(8) What amount does John have to pay after 6 years if he takes a loan of $3200 at 2% simple interest?
(9) How much loan did Barbara borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6660 to clear it?
(10) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?