Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 2% simple interest?
Correct Answer
$3696
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 2%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 2% simple interest means, Rate of Simple Interest (SI) is 2% 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 × 2% × 6
= $3300 ×2/100 × 6
= 3300 × 2 × 6/100
= 6600 × 6/100
= 39600/100
= $396
Thus, Simple Interest = $396
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 + $396
= $3696
Thus, Amount to be paid = $3696 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) = 2%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 2% × 6)
= $3300 + ($3300 ×2/100 × 6)
= $3300 + (3300 × 2 × 6/100)
= $3300 + (6600 × 6/100)
= $3300 + (39600/100)
= $3300 + $396 = $3696
Thus, Amount (A) to be paid = $3696 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 2%
This, means, $2 per $100 per year
∵ For $100, the simple interest for 1 year = $2
∴ For $1, the simple interest for 1 year = 2/100
∴ For $3300, the simple interest in 1 year
= 2/100 × 3300
= 2 × 3300/100
= 6600/100 = $66
Thus, simple interest for 1 year = $66
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $66 × 6 = $396
Thus, Simple Interest (SI) = $396
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $396
= $3696
Thus, Amount to be paid = $3696 Answer
Similar Questions
(1) Calculate the amount due if Joseph borrowed a sum of $3700 at 4% simple interest for 4 years.
(2) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 5% simple interest for 4 years.
(3) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 10% simple interest?
(4) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 2% simple interest?
(5) How much loan did Emily borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8100 to clear it?
(6) Calculate the amount due if Linda borrowed a sum of $3350 at 10% simple interest for 4 years.
(7) What amount will be due after 2 years if David borrowed a sum of $3200 at a 4% simple interest?
(8) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $8476 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Linda borrowed a sum of $5350 at 7% simple interest for 7 years.
(10) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.