Simple Interest
Math MCQs

Question :    If Sarah paid $4158 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

Correct Answer  $3850

Solution & Explanation

Solution

Given,

Amount (A) = $4158

Rate of Simple Interest (R) = 2%

Time (T) = 4 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

$4158 = P (1 + 2% × 4)

⇒ $4158 = P (1 + ²/₁₀₀ × 4)

⇒ $4158 = P (1 + ^{2 × 4}/₁₀₀)

⇒ $4158 = P (1 + ⁸/₁₀₀)

⇒ $4158 = P (^{100 + 8}/₁₀₀)

⇒ $4158 = P × ¹⁰⁸/₁₀₀

⇒ P × ¹⁰⁸/₁₀₀ = $4158

⇒ P = ⁴¹⁵⁸/_¹⁰⁸/100

⇒ P = 4158 × ¹⁰⁰/₁₀₈

⇒ P = ^{4158 × 100}/₁₀₈

⇒ P = ⁴¹⁵⁸⁰⁰/₁₀₈

⇒ 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 = 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 = 4 years

So, we need to calculate the simple interest for the given time period, which is 4 years

Thus, Simple Interest for 4 years = 4 × Simple Interest for 1 year

= 4 × 2 = 8

Thus, simple interest for 4 years = 8

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 8 = 108

Calculation of the Principal

Now,

∵ If the Amount is 108, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₀₈

∴ If the Amount is 4158, then the Principal = ¹⁰⁰/₁₀₈ × 4158

= ^{100 × 4158}/₁₀₈

= ⁴¹⁵⁸⁰⁰/₁₀₈

= 3850

Thus, Principal = $3850

Thus, the sum borrowed = $3850 Answer

Similar Questions

(1) Betty took a loan of $6500 at the rate of 10% simple interest per annum. If he paid an amount of $11700 to clear the loan, then find the time period of the loan.

(2) Calculate the amount due if Sarah borrowed a sum of $3850 at 3% simple interest for 3 years.

(3) Steven had to pay $5014 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.

(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 10% simple interest for 7 years.

(5) Calculate the amount due if Mary borrowed a sum of $3050 at 6% simple interest for 3 years.

(6) What amount does William have to pay after 5 years if he takes a loan of $3500 at 10% simple interest?

(7) What amount will be due after 2 years if Charles borrowed a sum of $3450 at a 5% simple interest?

(8) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.

(9) Joseph had to pay $3922 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.

(10) Richard had to pay $4140 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.