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) Mark had to pay $4796 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(2) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?
(3) William took a loan of $5000 at the rate of 8% simple interest per annum. If he paid an amount of $7800 to clear the loan, then find the time period of the loan.
(4) What amount will be due after 2 years if Richard borrowed a sum of $3300 at a 10% simple interest?
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 4 years.
(6) What amount does David have to pay after 5 years if he takes a loan of $3400 at 2% simple interest?
(7) If Jennifer paid $3900 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Sarah borrowed a sum of $5850 at a rate of 8% simple interest.
(10) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.