Simple Interest
Math MCQs

Question :    Susan had to pay $3869 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  $3650

Solution & Explanation

Solution

Given,

Amount (A) = $3869

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

$3869 = P (1 + 2% × 3)

⇒ $3869 = P (1 + ²/₁₀₀ × 3)

⇒ $3869 = P (1 + ^{2 × 3}/₁₀₀)

⇒ $3869 = P (1 + ⁶/₁₀₀)

⇒ $3869 = P (^{100 + 6}/₁₀₀)

⇒ $3869 = P × ¹⁰⁶/₁₀₀

⇒ P × ¹⁰⁶/₁₀₀ = $3869

⇒ P = ³⁸⁶⁹/_¹⁰⁶/100

⇒ P = 3869 × ¹⁰⁰/₁₀₆

⇒ P = ^{3869 × 100}/₁₀₆

⇒ P = ³⁸⁶⁹⁰⁰/₁₀₆

⇒ P = $3650

Thus, the sum borrowed (P) = $3650 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 3869, then the Principal = ¹⁰⁰/₁₀₆ × 3869

= ^{100 × 3869}/₁₀₆

= ³⁸⁶⁹⁰⁰/₁₀₆

= 3650

Thus, Principal = $3650

Thus, the sum borrowed = $3650 Answer

Similar Questions

(1) Calculate the amount due if Linda borrowed a sum of $3350 at 2% simple interest for 4 years.

(2) Calculate the amount due if James borrowed a sum of $3000 at 7% simple interest for 4 years.

(3) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 8% simple interest?

(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 8 years.

(5) Anthony took a loan of $6600 at the rate of 8% simple interest per annum. If he paid an amount of $9768 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 9% simple interest.

(7) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7104 to clear the loan, then find the time period of the loan.

(8) Patricia took a loan of $4300 at the rate of 7% simple interest per annum. If he paid an amount of $6407 to clear the loan, then find the time period of the loan.

(9) If Elizabeth paid $3726 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(10) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $9350 to clear the loan, then find the time period of the loan.