Simple Interest
Math MCQs

Question :    If Charles paid $4524 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.

Correct Answer  $3900

Solution & Explanation

Solution

Given,

Amount (A) = $4524

Rate of Simple Interest (R) = 4%

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

$4524 = P (1 + 4% × 4)

⇒ $4524 = P (1 + ⁴/₁₀₀ × 4)

⇒ $4524 = P (1 + ^{4 × 4}/₁₀₀)

⇒ $4524 = P (1 + ¹⁶/₁₀₀)

⇒ $4524 = P (^{100 + 16}/₁₀₀)

⇒ $4524 = P × ¹¹⁶/₁₀₀

⇒ P × ¹¹⁶/₁₀₀ = $4524

⇒ P = ⁴⁵²⁴/_¹¹⁶/100

⇒ P = 4524 × ¹⁰⁰/₁₁₆

⇒ P = ^{4524 × 100}/₁₁₆

⇒ P = ⁴⁵²⁴⁰⁰/₁₁₆

⇒ P = $3900

Thus, the sum borrowed (P) = $3900 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 = 4% per annum

Thus, Interest = 4% of principal

⇒ Interest = 4% of 100 = 4

Thus, Simple Interest for 1 year = 4

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 × 4 = 16

Thus, simple interest for 4 years = 16

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 16 = 116

Calculation of the Principal

Now,

∵ If the Amount is 116, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₁₆

∴ If the Amount is 4524, then the Principal = ¹⁰⁰/₁₁₆ × 4524

= ^{100 × 4524}/₁₁₆

= ⁴⁵²⁴⁰⁰/₁₁₆

= 3900

Thus, Principal = $3900

Thus, the sum borrowed = $3900 Answer

Similar Questions

(1) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.

(2) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 5% simple interest.

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

(4) Lisa took a loan of $6100 at the rate of 8% simple interest per annum. If he paid an amount of $10004 to clear the loan, then find the time period of the loan.

(5) What amount will be due after 2 years if Joseph borrowed a sum of $3350 at a 6% simple interest?

(6) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 9% simple interest?

(7) If James borrowed $3000 from a bank at a rate of 2% simple interest per annum then find the amount to be paid after 2 years.

(8) What amount will be due after 2 years if Donald borrowed a sum of $3750 at a 5% simple interest?

(9) In how much time a principal of $3200 will amount to $3488 at a simple interest of 3% per annum?

(10) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 8% simple interest.