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) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 4 years.
(2) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $14000 to clear the loan, then find the time period of the loan.
(3) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(4) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $6556 to clear the loan, then find the time period of the loan.
(5) In how much time a principal of $3050 will amount to $3538 at a simple interest of 4% per annum?
(6) 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.
(7) If James paid $3240 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) If Steven paid $4968 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(9) How much loan did Patricia borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5665 to clear it?
(10) Find the amount to be paid if Charles borrowed a sum of $5900 at 7% simple interest for 7 years.