Simple Interest
Math MCQs

Question :    If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

Correct Answer  $3100

Solution & Explanation

Solution

Given,

Amount (A) = $3472

Rate of Simple Interest (R) = 3%

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

$3472 = P (1 + 3% × 4)

⇒ $3472 = P (1 + ³/₁₀₀ × 4)

⇒ $3472 = P (1 + ^{3 × 4}/₁₀₀)

⇒ $3472 = P (1 + ¹²/₁₀₀)

⇒ $3472 = P (^{100 + 12}/₁₀₀)

⇒ $3472 = P × ¹¹²/₁₀₀

⇒ P × ¹¹²/₁₀₀ = $3472

⇒ P = ³⁴⁷²/_¹¹²/100

⇒ P = 3472 × ¹⁰⁰/₁₁₂

⇒ P = ^{3472 × 100}/₁₁₂

⇒ P = ³⁴⁷²⁰⁰/₁₁₂

⇒ P = $3100

Thus, the sum borrowed (P) = $3100 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 = 3% per annum

Thus, Interest = 3% of principal

⇒ Interest = 3% of 100 = 3

Thus, Simple Interest for 1 year = 3

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 × 3 = 12

Thus, simple interest for 4 years = 12

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 12 = 112

Calculation of the Principal

Now,

∵ If the Amount is 112, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₁₂

∴ If the Amount is 3472, then the Principal = ¹⁰⁰/₁₁₂ × 3472

= ^{100 × 3472}/₁₁₂

= ³⁴⁷²⁰⁰/₁₁₂

= 3100

Thus, Principal = $3100

Thus, the sum borrowed = $3100 Answer

Similar Questions

(1) Find the amount to be paid if Thomas borrowed a sum of $5800 at 5% simple interest for 8 years.

(2) Margaret took a loan of $6700 at the rate of 10% simple interest per annum. If he paid an amount of $12730 to clear the loan, then find the time period of the loan.

(3) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7854 to clear the loan, then find the time period of the loan.

(4) What amount does James have to pay after 5 years if he takes a loan of $3000 at 4% simple interest?

(5) Michael took a loan of $4600 at the rate of 6% simple interest per annum. If he paid an amount of $6808 to clear the loan, then find the time period of the loan.

(6) David took a loan of $4800 at the rate of 6% simple interest per annum. If he paid an amount of $6528 to clear the loan, then find the time period of the loan.

(7) Robert took a loan of $4200 at the rate of 8% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.

(8) If Sarah borrowed $3850 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.

(9) Charles took a loan of $5800 at the rate of 9% simple interest per annum. If he paid an amount of $8932 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 8% simple interest for 3 years.