Question:
Kimberly had to pay $5208 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
$4650
Solution And Explanation
Solution
Given,
Amount (A) = $5208
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
$5208 = P (1 + 4% × 3)
⇒ $5208 = P (1 + 4/100 × 3)
⇒ $5208 = P (1 + 4 × 3/100)
⇒ $5208 = P (1 + 12/100)
⇒ $5208 = P (100 + 12/100)
⇒ $5208 = P × 112/100
⇒ P × 112/100 = $5208
⇒ P = 5208/112/100
⇒ P = 5208 × 100/112
⇒ P = 5208 × 100/112
⇒ P = 520800/112
⇒ P = $4650
Thus, the sum borrowed (P) = $4650 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 5208, then the Principal = 100/112 × 5208
= 100 × 5208/112
= 520800/112
= 4650
Thus, Principal = $4650
Thus, the sum borrowed = $4650 Answer
Similar Questions
(1) What amount will be due after 2 years if John borrowed a sum of $3100 at a 10% simple interest?
(2) Robert took a loan of $4200 at the rate of 9% simple interest per annum. If he paid an amount of $7224 to clear the loan, then find the time period of the loan.
(3) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $9324 to clear the loan, then find the time period of the loan.
(4) Calculate the amount due if Jennifer borrowed a sum of $3250 at 6% simple interest for 3 years.
(5) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11160 to clear the loan, then find the time period of the loan.
(6) If Nancy paid $4482 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
(7) Calculate the amount due after 10 years if Robert borrowed a sum of $5100 at a rate of 3% simple interest.
(8) Calculate the amount due after 9 years if Elizabeth borrowed a sum of $5450 at a rate of 2% simple interest.
(9) Calculate the amount due if Charles borrowed a sum of $3900 at 4% simple interest for 3 years.
(10) In how much time a principal of $3150 will amount to $3654 at a simple interest of 4% per annum?