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) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 6% simple interest?
(2) Calculate the amount due if Mary borrowed a sum of $3050 at 5% simple interest for 3 years.
(3) Betty took a loan of $6500 at the rate of 9% simple interest per annum. If he paid an amount of $12350 to clear the loan, then find the time period of the loan.
(4) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 10% simple interest?
(5) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $8036 to clear the loan, then find the time period of the loan.
(6) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(7) Matthew took a loan of $6400 at the rate of 7% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
(8) What amount does Jennifer have to pay after 6 years if he takes a loan of $3250 at 9% simple interest?
(9) 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.
(10) If Matthew paid $4872 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.