Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?
Correct Answer
$4455
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 7%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 5
= $3300 ×7/100 × 5
= 3300 × 7 × 5/100
= 23100 × 5/100
= 115500/100
= $1155
Thus, Simple Interest = $1155
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 + $1155
= $4455
Thus, Amount to be paid = $4455 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) = 7%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 7% × 5)
= $3300 + ($3300 ×7/100 × 5)
= $3300 + (3300 × 7 × 5/100)
= $3300 + (23100 × 5/100)
= $3300 + (115500/100)
= $3300 + $1155 = $4455
Thus, Amount (A) to be paid = $4455 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3300, the simple interest in 1 year
= 7/100 × 3300
= 7 × 3300/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $231 × 5 = $1155
Thus, Simple Interest (SI) = $1155
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1155
= $4455
Thus, Amount to be paid = $4455 Answer
Similar Questions
(1) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 4% simple interest?
(2) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 2% simple interest?
(3) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 6% simple interest for 8 years.
(5) Jennifer took a loan of $4500 at the rate of 6% simple interest per annum. If he paid an amount of $6660 to clear the loan, then find the time period of the loan.
(6) Donna had to pay $5141 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 8% simple interest for 8 years.
(8) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 5% simple interest.
(9) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(10) What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?