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 Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(2) If Donna paid $5626 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(3) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 2% simple interest.
(4) Calculate the amount due if Karen borrowed a sum of $3950 at 7% simple interest for 3 years.
(5) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 10% simple interest?
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 7% simple interest for 7 years.
(7) Nancy had to pay $4399 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(8) Thomas took a loan of $5600 at the rate of 6% simple interest per annum. If he paid an amount of $7616 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(10) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 5% simple interest?