Question:
James had to pay $3270 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
Correct Answer
$3000
Solution And Explanation
Solution
Given,
Amount (A) = $3270
Rate of Simple Interest (R) = 3%
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
$3270 = P (1 + 3% × 3)
⇒ $3270 = P (1 + 3/100 × 3)
⇒ $3270 = P (1 + 3 × 3/100)
⇒ $3270 = P (1 + 9/100)
⇒ $3270 = P (100 + 9/100)
⇒ $3270 = P × 109/100
⇒ P × 109/100 = $3270
⇒ P = 3270/109/100
⇒ P = 3270 × 100/109
⇒ P = 3270 × 100/109
⇒ P = 327000/109
⇒ P = $3000
Thus, the sum borrowed (P) = $3000 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 = 3% per annum
Thus, Interest = 3% of principal
⇒ Interest = 3% of 100 = 3
Thus, Simple Interest for 1 year = 3
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 × 3 = 9
Thus, simple interest for 3 years = 9
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 9 = 109
Calculation of the Principal
Now,
∵ If the Amount is 109, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/109
∴ If the Amount is 3270, then the Principal = 100/109 × 3270
= 100 × 3270/109
= 327000/109
= 3000
Thus, Principal = $3000
Thus, the sum borrowed = $3000 Answer
Similar Questions
(1) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 3% simple interest?
(2) How much loan did Donna borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8220 to clear it?
(3) Andrew had to pay $5088 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(4) Elizabeth took a loan of $4900 at the rate of 10% simple interest per annum. If he paid an amount of $7840 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(6) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $9856 to clear the loan, then find the time period of the loan.
(7) Find the amount to be paid if Mary borrowed a sum of $5050 at 3% simple interest for 7 years.
(8) What amount does David have to pay after 5 years if he takes a loan of $3400 at 7% simple interest?
(9) Mary took a loan of $4100 at the rate of 10% simple interest per annum. If he paid an amount of $6560 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if Mary borrowed a sum of $5050 at a rate of 10% simple interest.