Question:
Matthew had to pay $4830 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
$4200
Solution And Explanation
Solution
Given,
Amount (A) = $4830
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
$4830 = P (1 + 5% × 3)
⇒ $4830 = P (1 + 5/100 × 3)
⇒ $4830 = P (1 + 5 × 3/100)
⇒ $4830 = P (1 + 15/100)
⇒ $4830 = P (100 + 15/100)
⇒ $4830 = P × 115/100
⇒ P × 115/100 = $4830
⇒ P = 4830/115/100
⇒ P = 4830 × 100/115
⇒ P = 4830 × 100/115
⇒ P = 483000/115
⇒ P = $4200
Thus, the sum borrowed (P) = $4200 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 4830, then the Principal = 100/115 × 4830
= 100 × 4830/115
= 483000/115
= 4200
Thus, Principal = $4200
Thus, the sum borrowed = $4200 Answer
Similar Questions
(1) Find the amount to be paid if John borrowed a sum of $5200 at 4% simple interest for 7 years.
(2) What amount does Jessica have to pay after 5 years if he takes a loan of $3750 at 5% simple interest?
(3) How much loan did Jason borrow 5 years ago at a rate of simple interest 5% per annum, if he paid $9625 to clear it?
(4) William took a loan of $5000 at the rate of 6% simple interest per annum. If he paid an amount of $8000 to clear the loan, then find the time period of the loan.
(5) Find the amount to be paid if Barbara borrowed a sum of $5550 at 7% simple interest for 7 years.
(6) If Steven paid $5336 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(7) Find the amount to be paid if Joseph borrowed a sum of $5700 at 6% simple interest for 7 years.
(8) Calculate the amount due after 9 years if Richard borrowed a sum of $5600 at a rate of 10% simple interest.
(9) Calculate the amount due if Karen borrowed a sum of $3950 at 6% simple interest for 3 years.
(10) What amount does Sarah have to pay after 5 years if he takes a loan of $3850 at 8% simple interest?