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) What amount does Elizabeth have to pay after 5 years if he takes a loan of $3450 at 10% simple interest?
(2) If Jessica borrowed $3750 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does Jessica have to pay after 6 years if he takes a loan of $3750 at 6% simple interest?
(4) What amount will be due after 2 years if James borrowed a sum of $3000 at a 8% simple interest?
(5) Calculate the amount due if Charles borrowed a sum of $3900 at 5% simple interest for 3 years.
(6) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $13200 to clear the loan, then find the time period of the loan.
(7) How much loan did John borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6500 to clear it?
(8) Calculate the amount due if Robert borrowed a sum of $3100 at 3% simple interest for 4 years.
(9) How much loan did Jacob borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9600 to clear it?
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?