Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 2% simple interest?
Correct Answer
$3630
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 2%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 5
= $3300 ×2/100 × 5
= 3300 × 2 × 5/100
= 6600 × 5/100
= 33000/100
= $330
Thus, Simple Interest = $330
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 + $330
= $3630
Thus, Amount to be paid = $3630 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) = 2%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 2% × 5)
= $3300 + ($3300 ×2/100 × 5)
= $3300 + (3300 × 2 × 5/100)
= $3300 + (6600 × 5/100)
= $3300 + (33000/100)
= $3300 + $330 = $3630
Thus, Amount (A) to be paid = $3630 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3300, the simple interest in 1 year
= 2/100 × 3300
= 2 × 3300/100
= 6600/100 = $66
Thus, simple interest for 1 year = $66
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $66 × 5 = $330
Thus, Simple Interest (SI) = $330
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $330
= $3630
Thus, Amount to be paid = $3630 Answer
Similar Questions
(1) Calculate the amount due after 9 years if Linda borrowed a sum of $5350 at a rate of 3% simple interest.
(2) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8112 to clear the loan, then find the time period of the loan.
(3) Mary took a loan of $4100 at the rate of 8% simple interest per annum. If he paid an amount of $6724 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 4% simple interest for 7 years.
(5) Calculate the amount due after 9 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
(7) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 8% simple interest.
(9) What amount will be due after 2 years if Matthew borrowed a sum of $3600 at a 6% simple interest?
(10) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 2% simple interest?