Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 4% simple interest?
Correct Answer
$3960
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 4%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 5
= $3300 ×4/100 × 5
= 3300 × 4 × 5/100
= 13200 × 5/100
= 66000/100
= $660
Thus, Simple Interest = $660
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 + $660
= $3960
Thus, Amount to be paid = $3960 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) = 4%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 4% × 5)
= $3300 + ($3300 ×4/100 × 5)
= $3300 + (3300 × 4 × 5/100)
= $3300 + (13200 × 5/100)
= $3300 + (66000/100)
= $3300 + $660 = $3960
Thus, Amount (A) to be paid = $3960 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3300, the simple interest in 1 year
= 4/100 × 3300
= 4 × 3300/100
= 13200/100 = $132
Thus, simple interest for 1 year = $132
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $132 × 5 = $660
Thus, Simple Interest (SI) = $660
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $660
= $3960
Thus, Amount to be paid = $3960 Answer
Similar Questions
(1) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 8 years.
(2) How much loan did Laura borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8635 to clear it?
(3) Calculate the amount due after 10 years if Patricia borrowed a sum of $5150 at a rate of 4% simple interest.
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 4% simple interest?
(5) If Emily paid $5320 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(6) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 9% simple interest?
(7) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $8200 to clear the loan, then find the time period of the loan.
(8) 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.
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 3% simple interest.
(10) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 7% simple interest?