Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 3% simple interest?
Correct Answer
$3894
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 3%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 3% simple interest means, Rate of Simple Interest (SI) is 3% 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 × 3% × 6
= $3300 ×3/100 × 6
= 3300 × 3 × 6/100
= 9900 × 6/100
= 59400/100
= $594
Thus, Simple Interest = $594
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 + $594
= $3894
Thus, Amount to be paid = $3894 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) = 3%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 3% × 6)
= $3300 + ($3300 ×3/100 × 6)
= $3300 + (3300 × 3 × 6/100)
= $3300 + (9900 × 6/100)
= $3300 + (59400/100)
= $3300 + $594 = $3894
Thus, Amount (A) to be paid = $3894 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 3%
This, means, $3 per $100 per year
∵ For $100, the simple interest for 1 year = $3
∴ For $1, the simple interest for 1 year = 3/100
∴ For $3300, the simple interest in 1 year
= 3/100 × 3300
= 3 × 3300/100
= 9900/100 = $99
Thus, simple interest for 1 year = $99
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $99 × 6 = $594
Thus, Simple Interest (SI) = $594
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $594
= $3894
Thus, Amount to be paid = $3894 Answer
Similar Questions
(1) Barbara took a loan of $5100 at the rate of 10% simple interest per annum. If he paid an amount of $8670 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 5% simple interest.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 9% simple interest?
(4) Daniel had to pay $4469 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.
(6) If Kenneth paid $5600 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(7) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $7238 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Michael borrowed a sum of $3300 at 7% simple interest for 3 years.
(9) Calculate the amount due if Barbara borrowed a sum of $3550 at 10% simple interest for 3 years.
(10) Calculate the amount due after 9 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.