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) Anthony took a loan of $6600 at the rate of 6% simple interest per annum. If he paid an amount of $8976 to clear the loan, then find the time period of the loan.
(2) Karen had to pay $4542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(3) If John borrowed $3200 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(4) Joseph took a loan of $5400 at the rate of 6% simple interest per annum. If he paid an amount of $8316 to clear the loan, then find the time period of the loan.
(5) Richard took a loan of $5200 at the rate of 9% simple interest per annum. If he paid an amount of $8008 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if Barbara borrowed a sum of $5550 at 6% simple interest for 8 years.
(7) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 10% simple interest for 8 years.
(8) Sarah took a loan of $5700 at the rate of 9% simple interest per annum. If he paid an amount of $9804 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Linda borrowed a sum of $3350 at 5% simple interest for 3 years.
(10) Calculate the amount due if Susan borrowed a sum of $3650 at 4% simple interest for 3 years.