Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 7% simple interest?
Correct Answer
$4686
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 7%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% 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 × 7% × 6
= $3300 ×7/100 × 6
= 3300 × 7 × 6/100
= 23100 × 6/100
= 138600/100
= $1386
Thus, Simple Interest = $1386
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 + $1386
= $4686
Thus, Amount to be paid = $4686 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) = 7%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 7% × 6)
= $3300 + ($3300 ×7/100 × 6)
= $3300 + (3300 × 7 × 6/100)
= $3300 + (23100 × 6/100)
= $3300 + (138600/100)
= $3300 + $1386 = $4686
Thus, Amount (A) to be paid = $4686 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3300, the simple interest in 1 year
= 7/100 × 3300
= 7 × 3300/100
= 23100/100 = $231
Thus, simple interest for 1 year = $231
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $231 × 6 = $1386
Thus, Simple Interest (SI) = $1386
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1386
= $4686
Thus, Amount to be paid = $4686 Answer
Similar Questions
(1) Find the amount to be paid if Charles borrowed a sum of $5900 at 2% simple interest for 7 years.
(2) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 4% simple interest for 8 years.
(4) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $10260 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 7% simple interest.
(6) What amount will be due after 2 years if Thomas borrowed a sum of $3400 at a 10% simple interest?
(7) Calculate the amount due if Susan borrowed a sum of $3650 at 8% simple interest for 3 years.
(8) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9180 to clear the loan, then find the time period of the loan.
(9) Anthony took a loan of $6600 at the rate of 10% simple interest per annum. If he paid an amount of $11220 to clear the loan, then find the time period of the loan.
(10) Elizabeth took a loan of $4900 at the rate of 8% simple interest per annum. If he paid an amount of $7644 to clear the loan, then find the time period of the loan.