Simple Interest
Math MCQs

Question :    Patricia had to pay $3622.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

Correct Answer  $3150

Solution & Explanation

Solution

Given,

Amount (A) = $3622.5

Rate of Simple Interest (R) = 5%

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

$3622.5 = P (1 + 5% × 3)

⇒ $3622.5 = P (1 + ⁵/₁₀₀ × 3)

⇒ $3622.5 = P (1 + ^{5 × 3}/₁₀₀)

⇒ $3622.5 = P (1 + ¹⁵/₁₀₀)

⇒ $3622.5 = P (^{100 + 15}/₁₀₀)

⇒ $3622.5 = P × ¹¹⁵/₁₀₀

⇒ P × ¹¹⁵/₁₀₀ = $3622.5

⇒ P = ^3622.5/_¹¹⁵/100

⇒ P = 3622.5 × ¹⁰⁰/₁₁₅

⇒ P = ^{3622.5 × 100}/₁₁₅

⇒ P = ³⁶²²⁵⁰/₁₁₅

⇒ P = $3150

Thus, the sum borrowed (P) = $3150 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 = 5% per annum

Thus, Interest = 5% of principal

⇒ Interest = 5% of 100 = 5

Thus, Simple Interest for 1 year = 5

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 × 5 = 15

Thus, simple interest for 3 years = 15

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 15 = 115

Calculation of the Principal

Now,

∵ If the Amount is 115, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₁₅

∴ If the Amount is 3622.5, then the Principal = ¹⁰⁰/₁₁₅ × 3622.5

= ^{100 × 3622.5}/₁₁₅

= ³⁶²²⁵⁰/₁₁₅

= 3150

Thus, Principal = $3150

Thus, the sum borrowed = $3150 Answer

Similar Questions

(1) Nancy took a loan of $6300 at the rate of 7% simple interest per annum. If he paid an amount of $10710 to clear the loan, then find the time period of the loan.

(2) How much loan did William borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $6875 to clear it?

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

(4) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 5% simple interest.

(5) Calculate the amount due after 10 years if Linda borrowed a sum of $5350 at a rate of 10% simple interest.

(6) Find the amount to be paid if Sarah borrowed a sum of $5850 at 10% simple interest for 7 years.

(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 9% simple interest for 4 years.

(8) How much loan did Donald borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $7150 to clear it?

(9) If Thomas paid $4256 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(10) Calculate the amount due if John borrowed a sum of $3200 at 5% simple interest for 3 years.