Question:
Daniel had to pay $4346 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
$4100
Solution And Explanation
Solution
Given,
Amount (A) = $4346
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
$4346 = P (1 + 2% × 3)
⇒ $4346 = P (1 + 2/100 × 3)
⇒ $4346 = P (1 + 2 × 3/100)
⇒ $4346 = P (1 + 6/100)
⇒ $4346 = P (100 + 6/100)
⇒ $4346 = P × 106/100
⇒ P × 106/100 = $4346
⇒ P = 4346/106/100
⇒ P = 4346 × 100/106
⇒ P = 4346 × 100/106
⇒ P = 434600/106
⇒ P = $4100
Thus, the sum borrowed (P) = $4100 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 4346, then the Principal = 100/106 × 4346
= 100 × 4346/106
= 434600/106
= 4100
Thus, Principal = $4100
Thus, the sum borrowed = $4100 Answer
Similar Questions
(1) Calculate the amount due if Jessica borrowed a sum of $3750 at 3% simple interest for 3 years.
(2) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 6% simple interest?
(3) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 2% simple interest?
(4) Find the amount to be paid if Christopher borrowed a sum of $6000 at 3% simple interest for 7 years.
(5) Daniel took a loan of $6200 at the rate of 6% simple interest per annum. If he paid an amount of $8804 to clear the loan, then find the time period of the loan.
(6) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 6% simple interest.
(7) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(8) Donald took a loan of $7000 at the rate of 7% simple interest per annum. If he paid an amount of $9940 to clear the loan, then find the time period of the loan.
(9) If Betty paid $4760 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(10) Margaret took a loan of $6700 at the rate of 7% simple interest per annum. If he paid an amount of $9983 to clear the loan, then find the time period of the loan.