Question:
Daniel had to pay $4715 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
$4100
Solution And Explanation
Solution
Given,
Amount (A) = $4715
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
$4715 = P (1 + 5% × 3)
⇒ $4715 = P (1 + 5/100 × 3)
⇒ $4715 = P (1 + 5 × 3/100)
⇒ $4715 = P (1 + 15/100)
⇒ $4715 = P (100 + 15/100)
⇒ $4715 = P × 115/100
⇒ P × 115/100 = $4715
⇒ P = 4715/115/100
⇒ P = 4715 × 100/115
⇒ P = 4715 × 100/115
⇒ P = 471500/115
⇒ P = $4100
Thus, the sum borrowed (P) = $4100 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 4715, then the Principal = 100/115 × 4715
= 100 × 4715/115
= 471500/115
= 4100
Thus, Principal = $4100
Thus, the sum borrowed = $4100 Answer
Similar Questions
(1) Find the amount to be paid if Susan borrowed a sum of $5650 at 10% simple interest for 7 years.
(2) What amount does David have to pay after 5 years if he takes a loan of $3400 at 4% simple interest?
(3) Donald took a loan of $7000 at the rate of 10% simple interest per annum. If he paid an amount of $11200 to clear the loan, then find the time period of the loan.
(4) Karen took a loan of $5900 at the rate of 9% simple interest per annum. If he paid an amount of $11210 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Mary borrowed a sum of $5050 at 7% simple interest for 7 years.
(6) Jennifer had to pay $3737.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(7) Calculate the amount due if Karen borrowed a sum of $3950 at 3% simple interest for 3 years.
(8) Calculate the amount due after 10 years if Barbara borrowed a sum of $5550 at a rate of 9% simple interest.
(9) How much loan did Stephanie borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $9060 to clear it?
(10) Donald took a loan of $7000 at the rate of 8% simple interest per annum. If he paid an amount of $12040 to clear the loan, then find the time period of the loan.