Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 3% simple interest?
Correct Answer
$3795
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 3%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 5
= $3300 ×3/100 × 5
= 3300 × 3 × 5/100
= 9900 × 5/100
= 49500/100
= $495
Thus, Simple Interest = $495
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 + $495
= $3795
Thus, Amount to be paid = $3795 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) = 3%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 3% × 5)
= $3300 + ($3300 ×3/100 × 5)
= $3300 + (3300 × 3 × 5/100)
= $3300 + (9900 × 5/100)
= $3300 + (49500/100)
= $3300 + $495 = $3795
Thus, Amount (A) to be paid = $3795 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3300, the simple interest in 1 year
= 3/100 × 3300
= 3 × 3300/100
= 9900/100 = $99
Thus, simple interest for 1 year = $99
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $99 × 5 = $495
Thus, Simple Interest (SI) = $495
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $495
= $3795
Thus, Amount to be paid = $3795 Answer
Similar Questions
(1) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $7740 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 5% simple interest for 3 years.
(3) Calculate the amount due if William borrowed a sum of $3500 at 5% simple interest for 3 years.
(4) Joshua had to pay $5194 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Mary had to pay $3416 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(6) James took a loan of $4000 at the rate of 7% simple interest per annum. If he paid an amount of $5680 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(8) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 6% simple interest?
(9) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 3% simple interest for 7 years.
(10) Calculate the amount due if Joseph borrowed a sum of $3700 at 5% simple interest for 3 years.