Question:
Calculate the amount due if Michael borrowed a sum of $3300 at 10% simple interest for 4 years.
Correct Answer
$4620
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 10%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 4
= $3300 ×10/100 × 4
= 3300 × 10 × 4/100
= 33000 × 4/100
= 132000/100
= $1320
Thus, Simple Interest = $1320
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 + $1320
= $4620
Thus, Amount to be paid = $4620 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) = 10%
And, Time (t) = 4 years
Thus, Amount (A)
= $3300 + ($3300 × 10% × 4)
= $3300 + ($3300 ×10/100 × 4)
= $3300 + (3300 × 10 × 4/100)
= $3300 + (33000 × 4/100)
= $3300 + (132000/100)
= $3300 + $1320 = $4620
Thus, Amount (A) to be paid = $4620 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3300, the simple interest in 1 year
= 10/100 × 3300
= 10 × 3300/100
= 33000/100 = $330
Thus, simple interest for 1 year = $330
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $330 × 4 = $1320
Thus, Simple Interest (SI) = $1320
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1320
= $4620
Thus, Amount to be paid = $4620 Answer
Similar Questions
(1) If Jessica paid $4500 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(2) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 6% simple interest.
(3) Charles had to pay $4251 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(4) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 3 years.
(5) Calculate the amount due if James borrowed a sum of $3000 at 2% simple interest for 4 years.
(6) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 7% simple interest.
(7) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $7310 to clear the loan, then find the time period of the loan.
(8) Find the amount to be paid if James borrowed a sum of $5000 at 10% simple interest for 8 years.
(9) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 10% simple interest?
(10) Find the amount to be paid if Karen borrowed a sum of $5950 at 6% simple interest for 8 years.