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) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $7912 to clear the loan, then find the time period of the loan.
(2) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 10% simple interest?
(3) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7152 to clear the loan, then find the time period of the loan.
(4) David took a loan of $4800 at the rate of 7% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 7 years.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 3 years.
(7) Calculate the amount due if Joseph borrowed a sum of $3700 at 9% simple interest for 4 years.
(8) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) What amount does William have to pay after 5 years if he takes a loan of $3500 at 3% simple interest?
(10) Find the amount to be paid if Jessica borrowed a sum of $5750 at 8% simple interest for 8 years.