Simple Interest
Math MCQs

Question :    If Emily paid $5130 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

Correct Answer  $4750

Solution & Explanation

Solution

Given,

Amount (A) = $5130

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

$5130 = P (1 + 2% × 4)

⇒ $5130 = P (1 + ²/₁₀₀ × 4)

⇒ $5130 = P (1 + ^{2 × 4}/₁₀₀)

⇒ $5130 = P (1 + ⁸/₁₀₀)

⇒ $5130 = P (^{100 + 8}/₁₀₀)

⇒ $5130 = P × ¹⁰⁸/₁₀₀

⇒ P × ¹⁰⁸/₁₀₀ = $5130

⇒ P = ⁵¹³⁰/_¹⁰⁸/100

⇒ P = 5130 × ¹⁰⁰/₁₀₈

⇒ P = ^{5130 × 100}/₁₀₈

⇒ P = ⁵¹³⁰⁰⁰/₁₀₈

⇒ P = $4750

Thus, the sum borrowed (P) = $4750 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 5130, then the Principal = ¹⁰⁰/₁₀₈ × 5130

= ^{100 × 5130}/₁₀₈

= ⁵¹³⁰⁰⁰/₁₀₈

= 4750

Thus, Principal = $4750

Thus, the sum borrowed = $4750 Answer

Similar Questions

(1) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 9% simple interest.

(2) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 9% simple interest?

(3) Barbara took a loan of $5100 at the rate of 9% simple interest per annum. If he paid an amount of $9231 to clear the loan, then find the time period of the loan.

(4) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 4% simple interest.

(5) Calculate the amount due if John borrowed a sum of $3200 at 9% simple interest for 3 years.

(6) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 4 years.

(7) How much loan did Jacob borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9200 to clear it?

(8) John took a loan of $4400 at the rate of 10% simple interest per annum. If he paid an amount of $7480 to clear the loan, then find the time period of the loan.

(9) Robert took a loan of $4200 at the rate of 6% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.

(10) John had to pay $3680 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.