Question:
John had to pay $3488 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
$3200
Solution And Explanation
Solution
Given,
Amount (A) = $3488
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
$3488 = P (1 + 3% × 3)
⇒ $3488 = P (1 + 3/100 × 3)
⇒ $3488 = P (1 + 3 × 3/100)
⇒ $3488 = P (1 + 9/100)
⇒ $3488 = P (100 + 9/100)
⇒ $3488 = P × 109/100
⇒ P × 109/100 = $3488
⇒ P = 3488/109/100
⇒ P = 3488 × 100/109
⇒ P = 3488 × 100/109
⇒ P = 348800/109
⇒ 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 = 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 3488, then the Principal = 100/109 × 3488
= 100 × 3488/109
= 348800/109
= 3200
Thus, Principal = $3200
Thus, the sum borrowed = $3200 Answer
Similar Questions
(1) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?
(2) Calculate the amount due after 10 years if William borrowed a sum of $5500 at a rate of 2% simple interest.
(3) Find the amount to be paid if Robert borrowed a sum of $5100 at 10% simple interest for 8 years.
(4) If Jennifer paid $3770 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Calculate the amount due if Joseph borrowed a sum of $3700 at 6% simple interest for 4 years.
(6) Mark took a loan of $6800 at the rate of 9% simple interest per annum. If he paid an amount of $11696 to clear the loan, then find the time period of the loan.
(7) What amount does Joseph have to pay after 6 years if he takes a loan of $3700 at 4% simple interest?
(8) What amount does Patricia have to pay after 5 years if he takes a loan of $3150 at 7% simple interest?
(9) Calculate the amount due after 10 years if Michael borrowed a sum of $5300 at a rate of 8% simple interest.
(10) Mark had to pay $4664 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.