Question:
If Anthony paid $4644 to settle his loan which he had taken 4 years before at a simple interest of 2%, then find the loan taken.
Correct Answer
$4300
Solution And Explanation
Solution
Given,
Amount (A) = $4644
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
$4644 = P (1 + 2% × 4)
⇒ $4644 = P (1 + 2/100 × 4)
⇒ $4644 = P (1 + 2 × 4/100)
⇒ $4644 = P (1 + 8/100)
⇒ $4644 = P (100 + 8/100)
⇒ $4644 = P × 108/100
⇒ P × 108/100 = $4644
⇒ P = 4644/108/100
⇒ P = 4644 × 100/108
⇒ P = 4644 × 100/108
⇒ P = 464400/108
⇒ P = $4300
Thus, the sum borrowed (P) = $4300 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 4644, then the Principal = 100/108 × 4644
= 100 × 4644/108
= 464400/108
= 4300
Thus, Principal = $4300
Thus, the sum borrowed = $4300 Answer
Similar Questions
(1) Calculate the amount due if Mary borrowed a sum of $3050 at 10% simple interest for 3 years.
(2) Find the amount to be paid if Jessica borrowed a sum of $5750 at 5% simple interest for 7 years.
(3) How much loan did Deborah borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $8940 to clear it?
(4) Calculate the amount due if Barbara borrowed a sum of $3550 at 7% simple interest for 4 years.
(5) What amount does Robert have to pay after 6 years if he takes a loan of $3100 at 9% simple interest?
(6) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 10% simple interest for 4 years.
(7) What amount does Barbara have to pay after 6 years if he takes a loan of $3550 at 4% simple interest?
(8) How much loan did John borrow 5 years ago at a rate of simple interest 4% per annum, if he paid $6240 to clear it?
(9) Michael took a loan of $4600 at the rate of 9% simple interest per annum. If he paid an amount of $8740 to clear the loan, then find the time period of the loan.
(10) James had to pay $3360 in order to furnish the loan taken 3 years before. If the rate of simple interest was 4% then find the sum borrowed.