Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 6% simple interest?
Correct Answer
$4488
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 6%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 6% simple interest means, Rate of Simple Interest (SI) is 6% 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 × 6% × 6
= $3300 ×6/100 × 6
= 3300 × 6 × 6/100
= 19800 × 6/100
= 118800/100
= $1188
Thus, Simple Interest = $1188
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 + $1188
= $4488
Thus, Amount to be paid = $4488 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) = 6%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 6% × 6)
= $3300 + ($3300 ×6/100 × 6)
= $3300 + (3300 × 6 × 6/100)
= $3300 + (19800 × 6/100)
= $3300 + (118800/100)
= $3300 + $1188 = $4488
Thus, Amount (A) to be paid = $4488 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 6%
This, means, $6 per $100 per year
∵ For $100, the simple interest for 1 year = $6
∴ For $1, the simple interest for 1 year = 6/100
∴ For $3300, the simple interest in 1 year
= 6/100 × 3300
= 6 × 3300/100
= 19800/100 = $198
Thus, simple interest for 1 year = $198
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $198 × 6 = $1188
Thus, Simple Interest (SI) = $1188
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1188
= $4488
Thus, Amount to be paid = $4488 Answer
Similar Questions
(1) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 2% simple interest?
(2) Karen took a loan of $5900 at the rate of 10% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(3) If Kimberly paid $5394 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) Find the amount to be paid if Linda borrowed a sum of $5350 at 2% simple interest for 8 years.
(5) Barbara had to pay $3869.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(6) Andrew had to pay $5520 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) How much loan did Ashley borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $7860 to clear it?
(8) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 5% simple interest?
(9) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(10) How much loan did Deborah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $8195 to clear it?