Simple Interest
Math MCQs

Question :    John had to pay $3392 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

Correct Answer  $3200

Solution & Explanation

Solution

Given,

Amount (A) = $3392

Rate of Simple Interest (R) = 2%

Time (T) = 3 years

Thus, Principal (P) = ?

Method (1) Using Formula

Calculation of the Principal using forumula when Amount, Time and Rate of Simple Interest are given

Formula to find the Principal (P)

Amount (A) = Principal (P) + Principal (P) × Rate (R) × Time (T)

⇒ Amount (A) = Principal (P) [1 + Rate (R) × Time (T)]

⇒ A = P (1 + RT)

Using the formula to find the Amount (A), the fourth can be calculated if any three of A, P, R, and T are given

In the given question, we need to find the Principal (P)

Therefore, by substituting, Amount, Rate, and Time, in the formula A = P (1 + RT) we get

$3392 = P (1 + 2% × 3)

⇒ $3392 = P (1 + ²/₁₀₀ × 3)

⇒ $3392 = P (1 + ^{2 × 3}/₁₀₀)

⇒ $3392 = P (1 + ⁶/₁₀₀)

⇒ $3392 = P (^{100 + 6}/₁₀₀)

⇒ $3392 = P × ¹⁰⁶/₁₀₀

⇒ P × ¹⁰⁶/₁₀₀ = $3392

⇒ P = ³³⁹²/_¹⁰⁶/100

⇒ P = 3392 × ¹⁰⁰/₁₀₆

⇒ P = ^{3392 × 100}/₁₀₆

⇒ P = ³³⁹²⁰⁰/₁₀₆

⇒ P = $3200

Thus, the sum borrowed (P) = $3200 Answer

Method (1) Using Unitary Method

Calculation of the Principal using unitary method when Amount, Time and Rate of Simple Interest are given

Calculation of the Simple Interest

Let, the principal = 100

Here, since rate of simple interest = 2% per annum

Thus, Interest = 2% of principal

⇒ Interest = 2% of 100 = 2

Thus, Simple Interest for 1 year = 2

Calculation of the Amount

Since, in the question, time = 3 years

So, we need to calculate the simple interest for the given time period, which is 3 years

Thus, Simple Interest for 3 years = 3 × Simple Interest for 1 year

= 3 × 2 = 6

Thus, simple interest for 3 years = 6

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 6 = 106

Calculation of the Principal

Now,

∵ If the Amount is 106, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₀₆

∴ If the Amount is 3392, then the Principal = ¹⁰⁰/₁₀₆ × 3392

= ^{100 × 3392}/₁₀₆

= ³³⁹²⁰⁰/₁₀₆

= 3200

Thus, Principal = $3200

Thus, the sum borrowed = $3200 Answer

Similar Questions

(1) Calculate the amount due if David borrowed a sum of $3400 at 7% simple interest for 4 years.

(2) Donald took a loan of $7000 at the rate of 9% simple interest per annum. If he paid an amount of $11410 to clear the loan, then find the time period of the loan.

(3) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $7680 to clear the loan, then find the time period of the loan.

(4) Find the amount to be paid if Jennifer borrowed a sum of $5250 at 4% simple interest for 8 years.

(5) Calculate the amount due after 10 years if Joseph borrowed a sum of $5700 at a rate of 5% simple interest.

(6) Calculate the amount due if Karen borrowed a sum of $3950 at 10% simple interest for 3 years.

(7) How much loan did Robert borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $5610 to clear it?

(8) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 7% simple interest?

(9) Find the amount to be paid if Susan borrowed a sum of $5650 at 7% simple interest for 8 years.

(10) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.