Simple Interest
MCQs Math


Question:     Mary had to pay $3233 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.


Correct Answer  $3050

Solution And Explanation

Solution

Given,

Amount (A) = $3233

Rate of Simple Interest (R) = 2%

Time (T) = 3 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

$3233 = P (1 + 2% × 3)

⇒ $3233 = P (1 + 2/100 × 3)

⇒ $3233 = P (1 + 2 × 3/100)

⇒ $3233 = P (1 + 6/100)

⇒ $3233 = P (100 + 6/100)

⇒ $3233 = P × 106/100

⇒ P × 106/100 = $3233

⇒ P = 3233/106/100

⇒ P = 3233 × 100/106

⇒ P = 3233 × 100/106

⇒ P = 323300/106

⇒ P = $3050

Thus, the sum borrowed (P) = $3050 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 = 3 years

So, we need to calculate the simple interest for the given time period, which is 3 years

Thus, Simple Interest for 3 years = 3 × Simple Interest for 1 year

= 3 × 2 = 6

Thus, simple interest for 3 years = 6

Thus, Amount (A) = Principal + Interest

⇒ Amount = 100 + 6 = 106

Calculation of the Principal

Now,

∵ If the Amount is 106, then the Principal = 100

∴ If the Amount is 1, then the Principal = 100/106

∴ If the Amount is 3233, then the Principal = 100/106 × 3233

= 100 × 3233/106

= 323300/106

= 3050

Thus, Principal = $3050

Thus, the sum borrowed = $3050 Answer


Similar Questions

(1) What amount does Jennifer have to pay after 5 years if he takes a loan of $3250 at 6% simple interest?

(2) Elizabeth took a loan of $4900 at the rate of 6% simple interest per annum. If he paid an amount of $6664 to clear the loan, then find the time period of the loan.

(3) Linda took a loan of $4700 at the rate of 10% simple interest per annum. If he paid an amount of $7520 to clear the loan, then find the time period of the loan.

(4) If Jennifer paid $3640 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.

(5) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 7 years.

(6) What amount does Linda have to pay after 5 years if he takes a loan of $3350 at 7% simple interest?

(7) What amount will be due after 2 years if Andrew borrowed a sum of $3900 at a 7% simple interest?

(8) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11084 to clear the loan, then find the time period of the loan.

(9) Joseph took a loan of $5400 at the rate of 10% simple interest per annum. If he paid an amount of $9720 to clear the loan, then find the time period of the loan.

(10) Calculate the amount due if Susan borrowed a sum of $3650 at 2% simple interest for 4 years.


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