Question:
Margaret had to pay $4611 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
$4350
Solution And Explanation
Solution
Given,
Amount (A) = $4611
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
$4611 = P (1 + 2% × 3)
⇒ $4611 = P (1 + 2/100 × 3)
⇒ $4611 = P (1 + 2 × 3/100)
⇒ $4611 = P (1 + 6/100)
⇒ $4611 = P (100 + 6/100)
⇒ $4611 = P × 106/100
⇒ P × 106/100 = $4611
⇒ P = 4611/106/100
⇒ P = 4611 × 100/106
⇒ P = 4611 × 100/106
⇒ P = 461100/106
⇒ P = $4350
Thus, the sum borrowed (P) = $4350 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 4611, then the Principal = 100/106 × 4611
= 100 × 4611/106
= 461100/106
= 4350
Thus, Principal = $4350
Thus, the sum borrowed = $4350 Answer
Similar Questions
(1) How much loan did Laura borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9812.5 to clear it?
(2) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 4% simple interest?
(3) Jessica took a loan of $5500 at the rate of 6% simple interest per annum. If he paid an amount of $8800 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if Jennifer borrowed a sum of $5250 at a rate of 10% simple interest.
(5) What amount does Karen have to pay after 6 years if he takes a loan of $3950 at 10% simple interest?
(6) Calculate the amount due after 9 years if David borrowed a sum of $5400 at a rate of 10% simple interest.
(7) Calculate the amount due if Mary borrowed a sum of $3050 at 4% simple interest for 4 years.
(8) What amount does Michael have to pay after 5 years if he takes a loan of $3300 at 9% simple interest?
(9) Calculate the amount due after 9 years if Barbara borrowed a sum of $5550 at a rate of 10% simple interest.
(10) Find the amount to be paid if Joseph borrowed a sum of $5700 at 10% simple interest for 8 years.