Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 5% simple interest?
Correct Answer
$4125
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 5%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 5
= $3300 ×5/100 × 5
= 3300 × 5 × 5/100
= 16500 × 5/100
= 82500/100
= $825
Thus, Simple Interest = $825
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 + $825
= $4125
Thus, Amount to be paid = $4125 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) = 5%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 5% × 5)
= $3300 + ($3300 ×5/100 × 5)
= $3300 + (3300 × 5 × 5/100)
= $3300 + (16500 × 5/100)
= $3300 + (82500/100)
= $3300 + $825 = $4125
Thus, Amount (A) to be paid = $4125 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3300, the simple interest in 1 year
= 5/100 × 3300
= 5 × 3300/100
= 16500/100 = $165
Thus, simple interest for 1 year = $165
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $165 × 5 = $825
Thus, Simple Interest (SI) = $825
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $825
= $4125
Thus, Amount to be paid = $4125 Answer
Similar Questions
(1) Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(2) Sarah took a loan of $5700 at the rate of 6% simple interest per annum. If he paid an amount of $9120 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 3 years.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 9% simple interest for 4 years.
(5) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.
(6) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 3% simple interest?
(7) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9472 to clear the loan, then find the time period of the loan.
(8) James had to pay $3180 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(9) Calculate the amount due if William borrowed a sum of $3500 at 4% simple interest for 3 years.
(10) Thomas took a loan of $5600 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.