Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 6% simple interest?
Correct Answer
$4290
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 6%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 5
= $3300 ×6/100 × 5
= 3300 × 6 × 5/100
= 19800 × 5/100
= 99000/100
= $990
Thus, Simple Interest = $990
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 + $990
= $4290
Thus, Amount to be paid = $4290 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) = 6%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 6% × 5)
= $3300 + ($3300 ×6/100 × 5)
= $3300 + (3300 × 6 × 5/100)
= $3300 + (19800 × 5/100)
= $3300 + (99000/100)
= $3300 + $990 = $4290
Thus, Amount (A) to be paid = $4290 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3300, the simple interest in 1 year
= 6/100 × 3300
= 6 × 3300/100
= 19800/100 = $198
Thus, simple interest for 1 year = $198
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $198 × 5 = $990
Thus, Simple Interest (SI) = $990
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $990
= $4290
Thus, Amount to be paid = $4290 Answer
Similar Questions
(1) Calculate the amount due if Robert borrowed a sum of $3100 at 7% simple interest for 4 years.
(2) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 8% simple interest?
(3) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 3 years.
(4) Calculate the amount due after 10 years if Susan borrowed a sum of $5650 at a rate of 5% simple interest.
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 10% simple interest?
(6) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $10106 to clear the loan, then find the time period of the loan.
(7) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(8) Anthony took a loan of $6600 at the rate of 9% simple interest per annum. If he paid an amount of $11352 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.
(10) How much loan did Andrew borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8500 to clear it?