Question:
Joseph had to pay $4033 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
$3700
Solution And Explanation
Solution
Given,
Amount (A) = $4033
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
$4033 = P (1 + 3% × 3)
⇒ $4033 = P (1 + 3/100 × 3)
⇒ $4033 = P (1 + 3 × 3/100)
⇒ $4033 = P (1 + 9/100)
⇒ $4033 = P (100 + 9/100)
⇒ $4033 = P × 109/100
⇒ P × 109/100 = $4033
⇒ P = 4033/109/100
⇒ P = 4033 × 100/109
⇒ P = 4033 × 100/109
⇒ P = 403300/109
⇒ P = $3700
Thus, the sum borrowed (P) = $3700 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 4033, then the Principal = 100/109 × 4033
= 100 × 4033/109
= 403300/109
= 3700
Thus, Principal = $3700
Thus, the sum borrowed = $3700 Answer
Similar Questions
(1) Calculate the amount due after 10 years if John borrowed a sum of $5200 at a rate of 6% simple interest.
(2) Christopher took a loan of $6000 at the rate of 10% simple interest per annum. If he paid an amount of $9600 to clear the loan, then find the time period of the loan.
(3) Linda took a loan of $4700 at the rate of 7% simple interest per annum. If he paid an amount of $7990 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due after 10 years if James borrowed a sum of $5000 at a rate of 3% simple interest.
(5) Jessica took a loan of $5500 at the rate of 7% simple interest per annum. If he paid an amount of $8195 to clear the loan, then find the time period of the loan.
(6) Find the amount to be paid if William borrowed a sum of $5500 at 7% simple interest for 8 years.
(7) What amount does Robert have to pay after 5 years if he takes a loan of $3100 at 5% simple interest?
(8) Find the amount to be paid if William borrowed a sum of $5500 at 5% simple interest for 8 years.
(9) Calculate the amount due if William borrowed a sum of $3500 at 6% simple interest for 4 years.
(10) How much loan did Ronald borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9000 to clear it?