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) What amount will be due after 2 years if Joshua borrowed a sum of $3950 at a 10% simple interest?
(2) How much loan did Karen borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $6842.5 to clear it?
(3) What amount will be due after 2 years if Michael borrowed a sum of $3150 at a 4% simple interest?
(4) How much loan did Mark borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8000 to clear it?
(5) How much loan did Michelle borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7645 to clear it?
(6) What amount does Richard have to pay after 6 years if he takes a loan of $3600 at 10% simple interest?
(7) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 4% simple interest?
(8) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 7% simple interest?
(9) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Lisa took a loan of $6100 at the rate of 10% simple interest per annum. If he paid an amount of $11590 to clear the loan, then find the time period of the loan.