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) If Charles paid $4368 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(2) Matthew took a loan of $6400 at the rate of 8% simple interest per annum. If he paid an amount of $9984 to clear the loan, then find the time period of the loan.
(3) James took a loan of $4000 at the rate of 8% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(4) In how much time a principal of $3050 will amount to $3294 at a simple interest of 2% per annum?
(5) What amount will be due after 2 years if Robert borrowed a sum of $3050 at a 7% simple interest?
(6) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(7) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 9% simple interest?
(8) Sarah took a loan of $5700 at the rate of 8% simple interest per annum. If he paid an amount of $8892 to clear the loan, then find the time period of the loan.
(9) Find the amount to be paid if Thomas borrowed a sum of $5800 at 2% simple interest for 8 years.
(10) Mary took a loan of $4100 at the rate of 7% simple interest per annum. If he paid an amount of $6109 to clear the loan, then find the time period of the loan.