Question:
What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?
Correct Answer
$4785
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 9%
Time (t) = 5 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 5
= $3300 ×9/100 × 5
= 3300 × 9 × 5/100
= 29700 × 5/100
= 148500/100
= $1485
Thus, Simple Interest = $1485
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 + $1485
= $4785
Thus, Amount to be paid = $4785 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) = 9%
And, Time (t) = 5 years
Thus, Amount (A)
= $3300 + ($3300 × 9% × 5)
= $3300 + ($3300 ×9/100 × 5)
= $3300 + (3300 × 9 × 5/100)
= $3300 + (29700 × 5/100)
= $3300 + (148500/100)
= $3300 + $1485 = $4785
Thus, Amount (A) to be paid = $4785 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3300, the simple interest in 1 year
= 9/100 × 3300
= 9 × 3300/100
= 29700/100 = $297
Thus, simple interest for 1 year = $297
Therefore, simple interest for 5 years
= Simple interest for 1 year × 5
= $297 × 5 = $1485
Thus, Simple Interest (SI) = $1485
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1485
= $4785
Thus, Amount to be paid = $4785 Answer
Similar Questions
(1) Find the amount to be paid if Patricia borrowed a sum of $5150 at 9% simple interest for 8 years.
(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?
(3) How much loan did Joshua borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7590 to clear it?
(4) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Patricia borrowed a sum of $5150 at 4% simple interest for 8 years.
(6) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 10% simple interest?
(7) Patricia took a loan of $4300 at the rate of 8% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(8) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 7 years.
(10) Mark took a loan of $6800 at the rate of 7% simple interest per annum. If he paid an amount of $9656 to clear the loan, then find the time period of the loan.