Question:
Michael had to pay $3696 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.
Correct Answer
$3300
Solution And Explanation
Solution
Given,
Amount (A) = $3696
Rate of Simple Interest (R) = 4%
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
$3696 = P (1 + 4% × 3)
⇒ $3696 = P (1 + 4/100 × 3)
⇒ $3696 = P (1 + 4 × 3/100)
⇒ $3696 = P (1 + 12/100)
⇒ $3696 = P (100 + 12/100)
⇒ $3696 = P × 112/100
⇒ P × 112/100 = $3696
⇒ P = 3696/112/100
⇒ P = 3696 × 100/112
⇒ P = 3696 × 100/112
⇒ P = 369600/112
⇒ P = $3300
Thus, the sum borrowed (P) = $3300 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 = 4% per annum
Thus, Interest = 4% of principal
⇒ Interest = 4% of 100 = 4
Thus, Simple Interest for 1 year = 4
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 × 4 = 12
Thus, simple interest for 3 years = 12
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 12 = 112
Calculation of the Principal
Now,
∵ If the Amount is 112, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/112
∴ If the Amount is 3696, then the Principal = 100/112 × 3696
= 100 × 3696/112
= 369600/112
= 3300
Thus, Principal = $3300
Thus, the sum borrowed = $3300 Answer
Similar Questions
(1) Matthew took a loan of $6400 at the rate of 9% simple interest per annum. If he paid an amount of $11584 to clear the loan, then find the time period of the loan.
(2) James took a loan of $4000 at the rate of 6% simple interest per annum. If he paid an amount of $5440 to clear the loan, then find the time period of the loan.
(3) What amount will be due after 2 years if John borrowed a sum of $3100 at a 7% simple interest?
(4) Calculate the amount due if William borrowed a sum of $3500 at 10% simple interest for 4 years.
(5) What amount will be due after 2 years if Mark borrowed a sum of $3700 at a 9% simple interest?
(6) If Michael paid $3960 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(7) How much loan did Jennifer borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6300 to clear it?
(8) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 9% simple interest.
(9) Calculate the amount due if Robert borrowed a sum of $3100 at 4% simple interest for 3 years.
(10) Nancy had to pay $4648 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.