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) Richard took a loan of $5200 at the rate of 7% simple interest per annum. If he paid an amount of $7748 to clear the loan, then find the time period of the loan.
(2) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(3) Calculate the amount due if Thomas borrowed a sum of $3800 at 10% simple interest for 4 years.
(4) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 8 years.
(5) How much loan did Barbara borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6937.5 to clear it?
(6) How much loan did Sarah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7020 to clear it?
(7) Find the amount to be paid if Michael borrowed a sum of $5300 at 4% simple interest for 8 years.
(8) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $13110 to clear the loan, then find the time period of the loan.
(9) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 6% simple interest for 3 years.