Question:
Mark had to pay $4796 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
$4400
Solution And Explanation
Solution
Given,
Amount (A) = $4796
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
$4796 = P (1 + 3% × 3)
⇒ $4796 = P (1 + 3/100 × 3)
⇒ $4796 = P (1 + 3 × 3/100)
⇒ $4796 = P (1 + 9/100)
⇒ $4796 = P (100 + 9/100)
⇒ $4796 = P × 109/100
⇒ P × 109/100 = $4796
⇒ P = 4796/109/100
⇒ P = 4796 × 100/109
⇒ P = 4796 × 100/109
⇒ P = 479600/109
⇒ P = $4400
Thus, the sum borrowed (P) = $4400 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 4796, then the Principal = 100/109 × 4796
= 100 × 4796/109
= 479600/109
= 4400
Thus, Principal = $4400
Thus, the sum borrowed = $4400 Answer
Similar Questions
(1) Betty took a loan of $6500 at the rate of 8% simple interest per annum. If he paid an amount of $9620 to clear the loan, then find the time period of the loan.
(2) In how much time a principal of $3200 will amount to $3680 at a simple interest of 3% per annum?
(3) How much loan did Jason borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9240 to clear it?
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 8% simple interest for 7 years.
(5) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(6) Calculate the amount due after 9 years if Michael borrowed a sum of $5300 at a rate of 3% simple interest.
(7) How much loan did Edward borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9120 to clear it?
(8) What amount does Thomas have to pay after 6 years if he takes a loan of $3800 at 7% simple interest?
(9) How much loan did Laura borrow 5 years ago at a rate of simple interest 3% per annum, if he paid $9027.5 to clear it?
(10) If Patricia paid $3402 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.