Question:
If Mary paid $3294 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
Correct Answer
$3050
Solution And Explanation
Solution
Given,
Amount (A) = $3294
Rate of Simple Interest (R) = 2%
Time (T) = 4 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
$3294 = P (1 + 2% × 4)
⇒ $3294 = P (1 + 2/100 × 4)
⇒ $3294 = P (1 + 2 × 4/100)
⇒ $3294 = P (1 + 8/100)
⇒ $3294 = P (100 + 8/100)
⇒ $3294 = P × 108/100
⇒ P × 108/100 = $3294
⇒ P = 3294/108/100
⇒ P = 3294 × 100/108
⇒ P = 3294 × 100/108
⇒ P = 329400/108
⇒ P = $3050
Thus, the sum borrowed (P) = $3050 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 = 2% per annum
Thus, Interest = 2% of principal
⇒ Interest = 2% of 100 = 2
Thus, Simple Interest for 1 year = 2
Calculation of the Amount
Since, in the question, time = 4 years
So, we need to calculate the simple interest for the given time period, which is 4 years
Thus, Simple Interest for 4 years = 4 × Simple Interest for 1 year
= 4 × 2 = 8
Thus, simple interest for 4 years = 8
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 8 = 108
Calculation of the Principal
Now,
∵ If the Amount is 108, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/108
∴ If the Amount is 3294, then the Principal = 100/108 × 3294
= 100 × 3294/108
= 329400/108
= 3050
Thus, Principal = $3050
Thus, the sum borrowed = $3050 Answer
Similar Questions
(1) What amount does David have to pay after 6 years if he takes a loan of $3400 at 6% simple interest?
(2) If Mary borrowed $3050 from a bank at a rate of 3% simple interest per annum then find the amount to be paid after 2 years.
(3) What amount does John have to pay after 6 years if he takes a loan of $3200 at 7% simple interest?
(4) Find the amount to be paid if Susan borrowed a sum of $5650 at 4% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 7% simple interest.
(6) Find the amount to be paid if Charles borrowed a sum of $5900 at 10% simple interest for 7 years.
(7) Betty had to pay $4887.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 5% then find the sum borrowed.
(8) Calculate the amount due after 10 years if Richard borrowed a sum of $5600 at a rate of 2% simple interest.
(9) What amount does Mary have to pay after 5 years if he takes a loan of $3050 at 6% simple interest?
(10) Thomas took a loan of $5600 at the rate of 7% simple interest per annum. If he paid an amount of $9520 to clear the loan, then find the time period of the loan.