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) How much loan did Melissa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8820 to clear it?
(2) Calculate the amount due after 10 years if Charles borrowed a sum of $5900 at a rate of 2% simple interest.
(3) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(4) Christopher had to pay $4600 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(5) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
(6) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $12540 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Sarah borrowed a sum of $5850 at 6% simple interest for 7 years.
(8) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5920 to clear the loan, then find the time period of the loan.
(9) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 7% simple interest?
(10) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 3 years.