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) If Donald paid $4860 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(2) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7360 to clear the loan, then find the time period of the loan.
(3) How much loan did Donna borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8562.5 to clear it?
(4) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(5) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 4% simple interest?
(6) In how much time a principal of $3100 will amount to $3379 at a simple interest of 3% per annum?
(7) If Patricia paid $3402 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Charles took a loan of $5800 at the rate of 7% simple interest per annum. If he paid an amount of $8642 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 9% simple interest.
(10) How much loan did Susan borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6780 to clear it?