Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 4 years.
Correct Answer
$4356
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 8%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 8% simple interest means, Rate of Simple Interest (SI) is 8% 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 × 8% × 4
= $3300 ×8/100 × 4
= 3300 × 8 × 4/100
= 26400 × 4/100
= 105600/100
= $1056
Thus, Simple Interest = $1056
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 + $1056
= $4356
Thus, Amount to be paid = $4356 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) = 8%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 8% × 4)
= $3300 + ($3300 ×8/100 × 4)
= $3300 + (3300 × 8 × 4/100)
= $3300 + (26400 × 4/100)
= $3300 + (105600/100)
= $3300 + $1056 = $4356
Thus, Amount (A) to be paid = $4356 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 8%
This, means, $8 per $100 per year
∵ For $100, the simple interest for 1 year = $8
∴ For $1, the simple interest for 1 year = 8/100
∴ For $3300, the simple interest in 1 year
= 8/100 × 3300
= 8 × 3300/100
= 26400/100 = $264
Thus, simple interest for 1 year = $264
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $264 × 4 = $1056
Thus, Simple Interest (SI) = $1056
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1056
= $4356
Thus, Amount to be paid = $4356 Answer
Similar Questions
(1) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 4 years.
(2) Daniel had to pay $4592 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(3) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $9780 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if David borrowed a sum of $3400 at 8% simple interest for 4 years.
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 8% simple interest?
(6) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 7% simple interest?
(7) How much loan did Rebecca borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8415 to clear it?
(8) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7009 to clear the loan, then find the time period of the loan.
(9) Susan took a loan of $5300 at the rate of 10% simple interest per annum. If he paid an amount of $10070 to clear the loan, then find the time period of the loan.
(10) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 9% simple interest?