Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 9% simple interest?
Correct Answer
$5082
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 9%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 9% simple interest means, Rate of Simple Interest (SI) is 9% 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 × 9% × 6
= $3300 ×9/100 × 6
= 3300 × 9 × 6/100
= 29700 × 6/100
= 178200/100
= $1782
Thus, Simple Interest = $1782
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 + $1782
= $5082
Thus, Amount to be paid = $5082 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) = 9%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 9% × 6)
= $3300 + ($3300 ×9/100 × 6)
= $3300 + (3300 × 9 × 6/100)
= $3300 + (29700 × 6/100)
= $3300 + (178200/100)
= $3300 + $1782 = $5082
Thus, Amount (A) to be paid = $5082 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 9%
This, means, $9 per $100 per year
∵ For $100, the simple interest for 1 year = $9
∴ For $1, the simple interest for 1 year = 9/100
∴ For $3300, the simple interest in 1 year
= 9/100 × 3300
= 9 × 3300/100
= 29700/100 = $297
Thus, simple interest for 1 year = $297
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $297 × 6 = $1782
Thus, Simple Interest (SI) = $1782
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1782
= $5082
Thus, Amount to be paid = $5082 Answer
Similar Questions
(1) John took a loan of $4400 at the rate of 7% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 8% simple interest.
(3) What amount does James have to pay after 6 years if he takes a loan of $3000 at 7% simple interest?
(4) Linda took a loan of $4700 at the rate of 9% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 6% simple interest for 4 years.
(6) How much loan did Michelle borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $8687.5 to clear it?
(7) Calculate the amount due if Thomas borrowed a sum of $3800 at 3% simple interest for 3 years.
(8) Calculate the amount due if Barbara borrowed a sum of $3550 at 3% simple interest for 3 years.
(9) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 7% simple interest.
(10) In how much time a principal of $3150 will amount to $3339 at a simple interest of 3% per annum?