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) Anthony took a loan of $6600 at the rate of 7% simple interest per annum. If he paid an amount of $9372 to clear the loan, then find the time period of the loan.
(2) If Emily paid $5700 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(3) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12127 to clear the loan, then find the time period of the loan.
(4) 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.
(5) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.
(6) How much loan did Kimberly borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7315 to clear it?
(7) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 8 years.
(8) In how much time a principal of $3050 will amount to $3812.5 at a simple interest of 5% per annum?
(9) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 4% simple interest.
(10) If Mary paid $3660 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.