Question:
Michelle had to pay $5544 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
$4950
Solution And Explanation
Solution
Given,
Amount (A) = $5544
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
$5544 = P (1 + 4% × 3)
⇒ $5544 = P (1 + 4/100 × 3)
⇒ $5544 = P (1 + 4 × 3/100)
⇒ $5544 = P (1 + 12/100)
⇒ $5544 = P (100 + 12/100)
⇒ $5544 = P × 112/100
⇒ P × 112/100 = $5544
⇒ P = 5544/112/100
⇒ P = 5544 × 100/112
⇒ P = 5544 × 100/112
⇒ P = 554400/112
⇒ 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 = 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 5544, then the Principal = 100/112 × 5544
= 100 × 5544/112
= 554400/112
= 4950
Thus, Principal = $4950
Thus, the sum borrowed = $4950 Answer
Similar Questions
(1) Find the amount to be paid if James borrowed a sum of $5000 at 7% simple interest for 7 years.
(2) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 8% simple interest?
(3) Mark took a loan of $6800 at the rate of 8% simple interest per annum. If he paid an amount of $11152 to clear the loan, then find the time period of the loan.
(4) Karen had to pay $4187 in order to furnish the loan taken 3 years before. If the rate of simple interest was 2% then find the sum borrowed.
(5) Sandra took a loan of $6900 at the rate of 9% simple interest per annum. If he paid an amount of $11247 to clear the loan, then find the time period of the loan.
(6) What amount does Patricia have to pay after 6 years if he takes a loan of $3150 at 10% simple interest?
(7) What amount will be due after 2 years if David borrowed a sum of $3200 at a 5% simple interest?
(8) Calculate the amount due after 10 years if Elizabeth borrowed a sum of $5450 at a rate of 5% simple interest.
(9) If Joshua paid $5880 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) Calculate the amount due if Jessica borrowed a sum of $3750 at 6% simple interest for 3 years.