Question:
Michelle had to pay $5395.5 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
$4950
Solution And Explanation
Solution
Given,
Amount (A) = $5395.5
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
$5395.5 = P (1 + 3% × 3)
⇒ $5395.5 = P (1 + 3/100 × 3)
⇒ $5395.5 = P (1 + 3 × 3/100)
⇒ $5395.5 = P (1 + 9/100)
⇒ $5395.5 = P (100 + 9/100)
⇒ $5395.5 = P × 109/100
⇒ P × 109/100 = $5395.5
⇒ P = 5395.5/109/100
⇒ P = 5395.5 × 100/109
⇒ P = 5395.5 × 100/109
⇒ P = 539550/109
⇒ P = $4950
Thus, the sum borrowed (P) = $4950 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 5395.5, then the Principal = 100/109 × 5395.5
= 100 × 5395.5/109
= 539550/109
= 4950
Thus, Principal = $4950
Thus, the sum borrowed = $4950 Answer
Similar Questions
(1) Calculate the amount due after 10 years if David borrowed a sum of $5400 at a rate of 2% simple interest.
(2) James took a loan of $4000 at the rate of 10% simple interest per annum. If he paid an amount of $7200 to clear the loan, then find the time period of the loan.
(3) Patricia took a loan of $4300 at the rate of 6% simple interest per annum. If he paid an amount of $6106 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(5) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 7% simple interest.
(6) Margaret had to pay $4872 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
(7) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 6% simple interest for 7 years.
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 8% simple interest for 7 years.
(9) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(10) Charles took a loan of $5800 at the rate of 6% simple interest per annum. If he paid an amount of $9280 to clear the loan, then find the time period of the loan.