Question:
Thomas had to pay $4370 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
Correct Answer
$3800
Solution And Explanation
Solution
Given,
Amount (A) = $4370
Rate of Simple Interest (R) = 5%
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
$4370 = P (1 + 5% × 3)
⇒ $4370 = P (1 + 5/100 × 3)
⇒ $4370 = P (1 + 5 × 3/100)
⇒ $4370 = P (1 + 15/100)
⇒ $4370 = P (100 + 15/100)
⇒ $4370 = P × 115/100
⇒ P × 115/100 = $4370
⇒ P = 4370/115/100
⇒ P = 4370 × 100/115
⇒ P = 4370 × 100/115
⇒ P = 437000/115
⇒ P = $3800
Thus, the sum borrowed (P) = $3800 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 = 5% per annum
Thus, Interest = 5% of principal
⇒ Interest = 5% of 100 = 5
Thus, Simple Interest for 1 year = 5
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 × 5 = 15
Thus, simple interest for 3 years = 15
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 15 = 115
Calculation of the Principal
Now,
∵ If the Amount is 115, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/115
∴ If the Amount is 4370, then the Principal = 100/115 × 4370
= 100 × 4370/115
= 437000/115
= 3800
Thus, Principal = $3800
Thus, the sum borrowed = $3800 Answer
Similar Questions
(1) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 3% simple interest?
(2) If Robert paid $3472 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
(3) How much loan did Thomas borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6960 to clear it?
(4) Michael took a loan of $4600 at the rate of 10% simple interest per annum. If he paid an amount of $7820 to clear the loan, then find the time period of the loan.
(5) Calculate the amount due after 9 years if Jennifer borrowed a sum of $5250 at a rate of 4% simple interest.
(6) Calculate the amount due after 10 years if Thomas borrowed a sum of $5800 at a rate of 4% simple interest.
(7) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 9% simple interest?
(8) Find the amount to be paid if Michael borrowed a sum of $5300 at 2% simple interest for 8 years.
(9) What amount will be due after 2 years if Kenneth borrowed a sum of $4000 at a 10% simple interest?
(10) Barbara took a loan of $5100 at the rate of 6% simple interest per annum. If he paid an amount of $7242 to clear the loan, then find the time period of the loan.