Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 5% simple interest?
Correct Answer
$4290
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 5%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 5% simple interest means, Rate of Simple Interest (SI) is 5% 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 × 5% × 6
= $3300 ×5/100 × 6
= 3300 × 5 × 6/100
= 16500 × 6/100
= 99000/100
= $990
Thus, Simple Interest = $990
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 + $990
= $4290
Thus, Amount to be paid = $4290 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) = 5%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 5% × 6)
= $3300 + ($3300 ×5/100 × 6)
= $3300 + (3300 × 5 × 6/100)
= $3300 + (16500 × 6/100)
= $3300 + (99000/100)
= $3300 + $990 = $4290
Thus, Amount (A) to be paid = $4290 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 5%
This, means, $5 per $100 per year
∵ For $100, the simple interest for 1 year = $5
∴ For $1, the simple interest for 1 year = 5/100
∴ For $3300, the simple interest in 1 year
= 5/100 × 3300
= 5 × 3300/100
= 16500/100 = $165
Thus, simple interest for 1 year = $165
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $165 × 6 = $990
Thus, Simple Interest (SI) = $990
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $990
= $4290
Thus, Amount to be paid = $4290 Answer
Similar Questions
(1) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(2) In how much time a principal of $3050 will amount to $3507.5 at a simple interest of 5% per annum?
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 8% simple interest.
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 8% simple interest for 3 years.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 5% simple interest for 4 years.
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(7) How much loan did David borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6210 to clear it?
(8) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 9% simple interest.
(9) What amount does James have to pay after 6 years if he takes a loan of $3000 at 8% simple interest?
(10) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.