Simple Interest
Math MCQs

Question :    Margaret had to pay $4611 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  $4350

Solution & Explanation

Solution

Given,

Amount (A) = $4611

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

$4611 = P (1 + 2% × 3)

⇒ $4611 = P (1 + ²/₁₀₀ × 3)

⇒ $4611 = P (1 + ^{2 × 3}/₁₀₀)

⇒ $4611 = P (1 + ⁶/₁₀₀)

⇒ $4611 = P (^{100 + 6}/₁₀₀)

⇒ $4611 = P × ¹⁰⁶/₁₀₀

⇒ P × ¹⁰⁶/₁₀₀ = $4611

⇒ P = ⁴⁶¹¹/_¹⁰⁶/100

⇒ P = 4611 × ¹⁰⁰/₁₀₆

⇒ P = ^{4611 × 100}/₁₀₆

⇒ P = ⁴⁶¹¹⁰⁰/₁₀₆

⇒ P = $4350

Thus, the sum borrowed (P) = $4350 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 4611, then the Principal = ¹⁰⁰/₁₀₆ × 4611

= ^{100 × 4611}/₁₀₆

= ⁴⁶¹¹⁰⁰/₁₀₆

= 4350

Thus, Principal = $4350

Thus, the sum borrowed = $4350 Answer

Similar Questions

(1) If Kimberly paid $5022 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(2) Patricia took a loan of $4300 at the rate of 9% simple interest per annum. If he paid an amount of $7783 to clear the loan, then find the time period of the loan.

(3) Margaret had to pay $4611 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(4) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.

(5) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?

(6) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.

(7) What amount does James have to pay after 6 years if he takes a loan of $3000 at 9% simple interest?

(8) Daniel took a loan of $6200 at the rate of 8% simple interest per annum. If he paid an amount of $9672 to clear the loan, then find the time period of the loan.

(9) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $10148 to clear the loan, then find the time period of the loan.

(10) Find the amount to be paid if Richard borrowed a sum of $5600 at 10% simple interest for 8 years.