Question:
John had to pay $3392 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
$3200
Solution And Explanation
Solution
Given,
Amount (A) = $3392
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
$3392 = P (1 + 2% × 3)
⇒ $3392 = P (1 + 2/100 × 3)
⇒ $3392 = P (1 + 2 × 3/100)
⇒ $3392 = P (1 + 6/100)
⇒ $3392 = P (100 + 6/100)
⇒ $3392 = P × 106/100
⇒ P × 106/100 = $3392
⇒ P = 3392/106/100
⇒ P = 3392 × 100/106
⇒ P = 3392 × 100/106
⇒ P = 339200/106
⇒ P = $3200
Thus, the sum borrowed (P) = $3200 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 3392, then the Principal = 100/106 × 3392
= 100 × 3392/106
= 339200/106
= 3200
Thus, Principal = $3200
Thus, the sum borrowed = $3200 Answer
Similar Questions
(1) Richard took a loan of $5200 at the rate of 6% simple interest per annum. If he paid an amount of $7384 to clear the loan, then find the time period of the loan.
(2) Calculate the amount due if Richard borrowed a sum of $3600 at 4% simple interest for 3 years.
(3) What amount does Richard have to pay after 5 years if he takes a loan of $3600 at 5% simple interest?
(4) Calculate the amount due if Joseph borrowed a sum of $3700 at 3% simple interest for 4 years.
(5) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 2% simple interest.
(6) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 5% simple interest for 7 years.
(7) Calculate the amount due if Jennifer borrowed a sum of $3250 at 3% simple interest for 3 years.
(8) Christopher took a loan of $6000 at the rate of 9% simple interest per annum. If he paid an amount of $11400 to clear the loan, then find the time period of the loan.
(9) Jennifer took a loan of $4500 at the rate of 9% simple interest per annum. If he paid an amount of $7335 to clear the loan, then find the time period of the loan.
(10) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 8% simple interest?