Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 9% simple interest for 4 years.
Correct Answer
$4488
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 9%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 4
= $3300 ×9/100 × 4
= 3300 × 9 × 4/100
= 29700 × 4/100
= 118800/100
= $1188
Thus, Simple Interest = $1188
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 + $1188
= $4488
Thus, Amount to be paid = $4488 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) = 9%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 9% × 4)
= $3300 + ($3300 ×9/100 × 4)
= $3300 + (3300 × 9 × 4/100)
= $3300 + (29700 × 4/100)
= $3300 + (118800/100)
= $3300 + $1188 = $4488
Thus, Amount (A) to be paid = $4488 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3300, the simple interest in 1 year
= 9/100 × 3300
= 9 × 3300/100
= 29700/100 = $297
Thus, simple interest for 1 year = $297
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $297 × 4 = $1188
Thus, Simple Interest (SI) = $1188
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1188
= $4488
Thus, Amount to be paid = $4488 Answer
Similar Questions
(1) How much loan did Mary borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $5807.5 to clear it?
(2) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6396 to clear the loan, then find the time period of the loan.
(3) David took a loan of $4800 at the rate of 9% simple interest per annum. If he paid an amount of $7824 to clear the loan, then find the time period of the loan.
(4) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $6800 to clear the loan, then find the time period of the loan.
(5) How much loan did Robert borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6375 to clear it?
(6) Find the amount to be paid if Karen borrowed a sum of $5950 at 5% simple interest for 7 years.
(7) What amount does Karen have to pay after 5 years if he takes a loan of $3950 at 7% simple interest?
(8) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $8772 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Patricia borrowed a sum of $5150 at 10% simple interest for 8 years.
(10) In how much time a principal of $3000 will amount to $3120 at a simple interest of 2% per annum?