Simple Interest
Math MCQs

Question :    If David paid $3808 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

Correct Answer  $3400

Solution & Explanation

Solution

Given,

Amount (A) = $3808

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

$3808 = P (1 + 3% × 4)

⇒ $3808 = P (1 + ³/₁₀₀ × 4)

⇒ $3808 = P (1 + ^{3 × 4}/₁₀₀)

⇒ $3808 = P (1 + ¹²/₁₀₀)

⇒ $3808 = P (^{100 + 12}/₁₀₀)

⇒ $3808 = P × ¹¹²/₁₀₀

⇒ P × ¹¹²/₁₀₀ = $3808

⇒ P = ³⁸⁰⁸/_¹¹²/100

⇒ P = 3808 × ¹⁰⁰/₁₁₂

⇒ P = ^{3808 × 100}/₁₁₂

⇒ P = ³⁸⁰⁸⁰⁰/₁₁₂

⇒ P = $3400

Thus, the sum borrowed (P) = $3400 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 3808, then the Principal = ¹⁰⁰/₁₁₂ × 3808

= ^{100 × 3808}/₁₁₂

= ³⁸⁰⁸⁰⁰/₁₁₂

= 3400

Thus, Principal = $3400

Thus, the sum borrowed = $3400 Answer

Similar Questions

(1) Find the amount to be paid if Barbara borrowed a sum of $5550 at 8% simple interest for 7 years.

(2) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.

(3) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $9200 to clear the loan, then find the time period of the loan.

(4) If Barbara paid $3834 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.

(5) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 7% simple interest.

(6) Calculate the amount due after 9 years if Patricia borrowed a sum of $5150 at a rate of 5% simple interest.

(7) Sandra took a loan of $6900 at the rate of 6% simple interest per annum. If he paid an amount of $9384 to clear the loan, then find the time period of the loan.

(8) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 9% simple interest?

(9) Jessica took a loan of $5500 at the rate of 9% simple interest per annum. If he paid an amount of $8965 to clear the loan, then find the time period of the loan.

(10) Find the amount to be paid if Barbara borrowed a sum of $5550 at 2% simple interest for 8 years.