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) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 4 years.
(3) Linda took a loan of $4700 at the rate of 6% simple interest per annum. If he paid an amount of $6392 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Sarah borrowed a sum of $5850 at 9% simple interest for 8 years.
(5) What amount does David have to pay after 5 years if he takes a loan of $3400 at 6% simple interest?
(6) Sarah had to pay $4427.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 5% simple interest?
(8) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(9) Donna had to pay $5286.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(10) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $10317 to clear the loan, then find the time period of the loan.