Question:
Charles had to pay $4251 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
$3900
Solution And Explanation
Solution
Given,
Amount (A) = $4251
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
$4251 = P (1 + 3% × 3)
⇒ $4251 = P (1 + 3/100 × 3)
⇒ $4251 = P (1 + 3 × 3/100)
⇒ $4251 = P (1 + 9/100)
⇒ $4251 = P (100 + 9/100)
⇒ $4251 = P × 109/100
⇒ P × 109/100 = $4251
⇒ P = 4251/109/100
⇒ P = 4251 × 100/109
⇒ P = 4251 × 100/109
⇒ P = 425100/109
⇒ P = $3900
Thus, the sum borrowed (P) = $3900 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 4251, then the Principal = 100/109 × 4251
= 100 × 4251/109
= 425100/109
= 3900
Thus, Principal = $3900
Thus, the sum borrowed = $3900 Answer
Similar Questions
(1) Find the amount to be paid if Linda borrowed a sum of $5350 at 9% simple interest for 8 years.
(2) Sandra had to pay $4717 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(3) Margaret took a loan of $6700 at the rate of 8% simple interest per annum. If he paid an amount of $10988 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if Karen borrowed a sum of $5950 at 3% simple interest for 8 years.
(5) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?
(6) Calculate the amount due if Barbara borrowed a sum of $3550 at 6% simple interest for 3 years.
(7) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6364 to clear the loan, then find the time period of the loan.
(8) Calculate the amount due if Jennifer borrowed a sum of $3250 at 4% simple interest for 3 years.
(9) If Elizabeth paid $4140 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 4% simple interest?