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) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(2) What amount does Joseph have to pay after 5 years if he takes a loan of $3700 at 10% simple interest?
(3) Barbara took a loan of $5100 at the rate of 7% simple interest per annum. If he paid an amount of $7956 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Jessica borrowed a sum of $3750 at 7% simple interest for 3 years.
(5) Daniel took a loan of $6200 at the rate of 9% simple interest per annum. If he paid an amount of $11222 to clear the loan, then find the time period of the loan.
(6) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 10% simple interest?
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 7% simple interest for 7 years.
(8) What amount does Christopher have to pay after 5 years if he takes a loan of $4000 at 8% simple interest?
(9) Michael took a loan of $4600 at the rate of 7% simple interest per annum. If he paid an amount of $7176 to clear the loan, then find the time period of the loan.
(10) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 4% simple interest?