Question:
What amount does Michael have to pay after 6 years if he takes a loan of $3300 at 10% simple interest?
Correct Answer
$5280
Solution And Explanation
Solution
Given,
Principal (P) = $3300
Rate of Simple Interest (SI) = 10%
Time (t) = 6 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 10% simple interest means, Rate of Simple Interest (SI) is 10% 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 × 10% × 6
= $3300 ×10/100 × 6
= 3300 × 10 × 6/100
= 33000 × 6/100
= 198000/100
= $1980
Thus, Simple Interest = $1980
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 + $1980
= $5280
Thus, Amount to be paid = $5280 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) = 10%
And, Time (t) = 6 years
Thus, Amount (A)
= $3300 + ($3300 × 10% × 6)
= $3300 + ($3300 ×10/100 × 6)
= $3300 + (3300 × 10 × 6/100)
= $3300 + (33000 × 6/100)
= $3300 + (198000/100)
= $3300 + $1980 = $5280
Thus, Amount (A) to be paid = $5280 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 10%
This, means, $10 per $100 per year
∵ For $100, the simple interest for 1 year = $10
∴ For $1, the simple interest for 1 year = 10/100
∴ For $3300, the simple interest in 1 year
= 10/100 × 3300
= 10 × 3300/100
= 33000/100 = $330
Thus, simple interest for 1 year = $330
Therefore, simple interest for 6 years
= Simple interest for 1 year × 6
= $330 × 6 = $1980
Thus, Simple Interest (SI) = $1980
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3300 + $1980
= $5280
Thus, Amount to be paid = $5280 Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 5% simple interest for 7 years.
(2) If John paid $3456 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(3) Calculate the amount due after 10 years if Christopher borrowed a sum of $6000 at a rate of 5% simple interest.
(4) How much loan did Margaret borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $7302.5 to clear it?
(5) What amount does Mary have to pay after 6 years if he takes a loan of $3050 at 7% simple interest?
(6) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10836 to clear the loan, then find the time period of the loan.
(7) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $8170 to clear the loan, then find the time period of the loan.
(8) William took a loan of $5000 at the rate of 9% simple interest per annum. If he paid an amount of $9050 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Joseph borrowed a sum of $3700 at 10% simple interest for 4 years.
(10) What amount does Barbara have to pay after 5 years if he takes a loan of $3550 at 3% simple interest?