Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 4% simple interest?
Correct Answer
$4092
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 4%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 4% simple interest means, Rate of Simple Interest (SI) is 4% 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 × 4% × 6
= $3300 ×4/100 × 6
= 3300 × 4 × 6/100
= 13200 × 6/100
= 79200/100
= $792
Thus, Simple Interest = $792
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 + $792
= $4092
Thus, Amount to be paid = $4092 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) = 4%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 4% × 6)
= $3300 + ($3300 ×4/100 × 6)
= $3300 + (3300 × 4 × 6/100)
= $3300 + (13200 × 6/100)
= $3300 + (79200/100)
= $3300 + $792 = $4092
Thus, Amount (A) to be paid = $4092 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 4%
This, means, $4 per $100 per year
∵ For $100, the simple interest for 1 year = $4
∴ For $1, the simple interest for 1 year = 4/100
∴ For $3300, the simple interest in 1 year
= 4/100 × 3300
= 4 × 3300/100
= 13200/100 = $132
Thus, simple interest for 1 year = $132
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $132 × 6 = $792
Thus, Simple Interest (SI) = $792
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $792
= $4092
Thus, Amount to be paid = $4092 Answer
Similar Questions
(1) Calculate the amount due if Michael borrowed a sum of $3300 at 8% simple interest for 4 years.
(2) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 5% simple interest.
(3) Jessica took a loan of $5500 at the rate of 8% simple interest per annum. If he paid an amount of $8580 to clear the loan, then find the time period of the loan.
(4) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $9880 to clear the loan, then find the time period of the loan.
(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.
(6) What amount does John have to pay after 5 years if he takes a loan of $3200 at 2% simple interest?
(7) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?
(8) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 8 years.
(9) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(10) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $6160 to clear the loan, then find the time period of the loan.