Question:
Ashley had to pay $4959.5 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
$4550
Solution And Explanation
Solution
Given,
Amount (A) = $4959.5
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
$4959.5 = P (1 + 3% × 3)
⇒ $4959.5 = P (1 + 3/100 × 3)
⇒ $4959.5 = P (1 + 3 × 3/100)
⇒ $4959.5 = P (1 + 9/100)
⇒ $4959.5 = P (100 + 9/100)
⇒ $4959.5 = P × 109/100
⇒ P × 109/100 = $4959.5
⇒ P = 4959.5/109/100
⇒ P = 4959.5 × 100/109
⇒ P = 4959.5 × 100/109
⇒ P = 495950/109
⇒ P = $4550
Thus, the sum borrowed (P) = $4550 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 4959.5, then the Principal = 100/109 × 4959.5
= 100 × 4959.5/109
= 495950/109
= 4550
Thus, Principal = $4550
Thus, the sum borrowed = $4550 Answer
Similar Questions
(1) Paul had to pay $4982 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(2) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 6% simple interest.
(3) Calculate the amount due after 9 years if Joseph borrowed a sum of $5700 at a rate of 7% simple interest.
(4) If Andrew paid $5568 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(5) Find the amount to be paid if Joseph borrowed a sum of $5700 at 2% simple interest for 8 years.
(6) Christopher took a loan of $6000 at the rate of 6% simple interest per annum. If he paid an amount of $9240 to clear the loan, then find the time period of the loan.
(7) Calculate the amount due if Barbara borrowed a sum of $3550 at 5% simple interest for 4 years.
(8) Robert took a loan of $4200 at the rate of 10% simple interest per annum. If he paid an amount of $6720 to clear the loan, then find the time period of the loan.
(9) Susan took a loan of $5300 at the rate of 8% simple interest per annum. If he paid an amount of $9540 to clear the loan, then find the time period of the loan.
(10) Calculate the amount due after 9 years if James borrowed a sum of $5000 at a rate of 10% simple interest.