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) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $10064 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3000 will amount to $3750 at a simple interest of 5% per annum?
(3) If Karen borrowed $3950 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.
(4) If Nancy paid $4980 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(5) What amount will be due after 2 years if Paul borrowed a sum of $3850 at a 7% simple interest?
(6) Calculate the amount due if Thomas borrowed a sum of $3800 at 4% simple interest for 4 years.
(7) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
(8) Joseph had to pay $4033 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Thomas took a loan of $5600 at the rate of 9% simple interest per annum. If he paid an amount of $9128 to clear the loan, then find the time period of the loan.
(10) How much loan did Matthew borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7130 to clear it?