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) In how much time a principal of $3050 will amount to $3172 at a simple interest of 2% per annum?
(2) What amount does Charles have to pay after 6 years if he takes a loan of $3900 at 2% simple interest?
(3) How much loan did Nancy borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7072.5 to clear it?
(4) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $10136 to clear the loan, then find the time period of the loan.
(5) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 5% simple interest?
(6) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11868 to clear the loan, then find the time period of the loan.
(7) In how much time a principal of $3050 will amount to $3355 at a simple interest of 2% per annum?
(8) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 6% simple interest for 3 years.
(10) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 10% simple interest?