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 Mary borrowed a sum of $3050 at 10% simple interest for 4 years.
(2) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 4 years.
(3) If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(4) How much loan did William borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6325 to clear it?
(5) Calculate the amount due after 9 years if Thomas borrowed a sum of $5800 at a rate of 10% simple interest.
(6) What amount does William have to pay after 6 years if he takes a loan of $3500 at 9% simple interest?
(7) If James paid $3240 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(8) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.
(9) Sandra took a loan of $6900 at the rate of 7% simple interest per annum. If he paid an amount of $9798 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.