Simple Interest
Math MCQs

Question :    Sarah had to pay $4427.5 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  $3850

Solution & Explanation

Solution

Given,

Amount (A) = $4427.5

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

$4427.5 = P (1 + 5% × 3)

⇒ $4427.5 = P (1 + ⁵/₁₀₀ × 3)

⇒ $4427.5 = P (1 + ^{5 × 3}/₁₀₀)

⇒ $4427.5 = P (1 + ¹⁵/₁₀₀)

⇒ $4427.5 = P (^{100 + 15}/₁₀₀)

⇒ $4427.5 = P × ¹¹⁵/₁₀₀

⇒ P × ¹¹⁵/₁₀₀ = $4427.5

⇒ P = ^4427.5/_¹¹⁵/100

⇒ P = 4427.5 × ¹⁰⁰/₁₁₅

⇒ P = ^{4427.5 × 100}/₁₁₅

⇒ P = ⁴⁴²⁷⁵⁰/₁₁₅

⇒ P = $3850

Thus, the sum borrowed (P) = $3850 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 4427.5, then the Principal = ¹⁰⁰/₁₁₅ × 4427.5

= ^{100 × 4427.5}/₁₁₅

= ⁴⁴²⁷⁵⁰/₁₁₅

= 3850

Thus, Principal = $3850

Thus, the sum borrowed = $3850 Answer

Similar Questions

(1) How much loan did Melissa borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8820 to clear it?

(2) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.

(3) Susan took a loan of $5300 at the rate of 9% simple interest per annum. If he paid an amount of $8162 to clear the loan, then find the time period of the loan.

(4) Linda took a loan of $4700 at the rate of 8% simple interest per annum. If he paid an amount of $8084 to clear the loan, then find the time period of the loan.

(5) Calculate the amount due if James borrowed a sum of $3000 at 10% simple interest for 3 years.

(6) What amount does Sarah have to pay after 6 years if he takes a loan of $3850 at 8% simple interest?

(7) Joseph took a loan of $5400 at the rate of 8% simple interest per annum. If he paid an amount of $9288 to clear the loan, then find the time period of the loan.

(8) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 7% simple interest?

(9) Calculate the amount due after 9 years if William borrowed a sum of $5500 at a rate of 3% simple interest.

(10) How much loan did Carol borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $8107.5 to clear it?