Question:
Joshua had to pay $5488 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
$4900
Solution And Explanation
Solution
Given,
Amount (A) = $5488
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
$5488 = P (1 + 4% × 3)
⇒ $5488 = P (1 + 4/100 × 3)
⇒ $5488 = P (1 + 4 × 3/100)
⇒ $5488 = P (1 + 12/100)
⇒ $5488 = P (100 + 12/100)
⇒ $5488 = P × 112/100
⇒ P × 112/100 = $5488
⇒ P = 5488/112/100
⇒ P = 5488 × 100/112
⇒ P = 5488 × 100/112
⇒ P = 548800/112
⇒ P = $4900
Thus, the sum borrowed (P) = $4900 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 5488, then the Principal = 100/112 × 5488
= 100 × 5488/112
= 548800/112
= 4900
Thus, Principal = $4900
Thus, the sum borrowed = $4900 Answer
Similar Questions
(1) Jessica took a loan of $5500 at the rate of 10% simple interest per annum. If he paid an amount of $11000 to clear the loan, then find the time period of the loan.
(2) Margaret took a loan of $6700 at the rate of 6% simple interest per annum. If he paid an amount of $9112 to clear the loan, then find the time period of the loan.
(3) If Anthony paid $4816 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(4) Calculate the amount due after 10 years if Jessica borrowed a sum of $5750 at a rate of 3% simple interest.
(5) Calculate the amount due if Thomas borrowed a sum of $3800 at 8% simple interest for 3 years.
(6) Thomas took a loan of $5600 at the rate of 8% simple interest per annum. If he paid an amount of $10080 to clear the loan, then find the time period of the loan.
(7) What amount will be due after 2 years if Steven borrowed a sum of $3800 at a 7% simple interest?
(8) Donna had to pay $5286.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(9) Lisa took a loan of $6100 at the rate of 7% simple interest per annum. If he paid an amount of $9516 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Christopher borrowed a sum of $6000 at 9% simple interest for 7 years.