Simple Interest
Math MCQs

Question :    If Robert paid $3720 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.

Correct Answer  $3100

Solution & Explanation

Solution

Given,

Amount (A) = $3720

Rate of Simple Interest (R) = 5%

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

$3720 = P (1 + 5% × 4)

⇒ $3720 = P (1 + ⁵/₁₀₀ × 4)

⇒ $3720 = P (1 + ^{5 × 4}/₁₀₀)

⇒ $3720 = P (1 + ²⁰/₁₀₀)

⇒ $3720 = P (^{100 + 20}/₁₀₀)

⇒ $3720 = P × ¹²⁰/₁₀₀

⇒ P × ¹²⁰/₁₀₀ = $3720

⇒ P = ³⁷²⁰/_¹²⁰/100

⇒ P = 3720 × ¹⁰⁰/₁₂₀

⇒ P = ^{3720 × 100}/₁₂₀

⇒ P = ³⁷²⁰⁰⁰/₁₂₀

⇒ 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 = 5% per annum

Thus, Interest = 5% of principal

⇒ Interest = 5% of 100 = 5

Thus, Simple Interest for 1 year = 5

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 × 5 = 20

Thus, simple interest for 4 years = 20

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 20 = 120

Calculation of the Principal

Now,

∵ If the Amount is 120, then the Principal = 100

∴ If the Amount is 1, then the Principal = ¹⁰⁰/₁₂₀

∴ If the Amount is 3720, then the Principal = ¹⁰⁰/₁₂₀ × 3720

= ^{100 × 3720}/₁₂₀

= ³⁷²⁰⁰⁰/₁₂₀

= 3100

Thus, Principal = $3100

Thus, the sum borrowed = $3100 Answer

Similar Questions

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

(2) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 10% simple interest?

(3) Find the amount to be paid if Jessica borrowed a sum of $5750 at 9% simple interest for 8 years.

(4) Linda had to pay $3852.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.

(5) Margaret took a loan of $6700 at the rate of 9% simple interest per annum. If he paid an amount of $10318 to clear the loan, then find the time period of the loan.

(6) Calculate the amount due after 10 years if Mary borrowed a sum of $5050 at a rate of 3% simple interest.

(7) What amount will be due after 2 years if Christopher borrowed a sum of $3500 at a 8% simple interest?

(8) Calculate the amount due if Robert borrowed a sum of $3100 at 8% simple interest for 3 years.

(9) Nancy took a loan of $6300 at the rate of 8% simple interest per annum. If he paid an amount of $10332 to clear the loan, then find the time period of the loan.

(10) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.