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 Sarah borrowed a sum of $5850 at 8% simple interest for 7 years.
(2) Nancy took a loan of $6300 at the rate of 10% simple interest per annum. If he paid an amount of $12600 to clear the loan, then find the time period of the loan.
(3) Sandra took a loan of $6900 at the rate of 8% simple interest per annum. If he paid an amount of $10764 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.
(5) Mary took a loan of $4100 at the rate of 9% simple interest per annum. If he paid an amount of $7421 to clear the loan, then find the time period of the loan.
(6) What amount will be due after 2 years if William borrowed a sum of $3250 at a 6% simple interest?
(7) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $8460 to clear the loan, then find the time period of the loan.
(8) What amount does Christopher have to pay after 6 years if he takes a loan of $4000 at 2% simple interest?
(9) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 7 years.