Question:
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.
Correct Answer
$3100
Solution And Explanation
Solution
Given,
Amount (A) = $3472
Rate of Simple Interest (R) = 3%
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
$3472 = P (1 + 3% × 4)
⇒ $3472 = P (1 + 3/100 × 4)
⇒ $3472 = P (1 + 3 × 4/100)
⇒ $3472 = P (1 + 12/100)
⇒ $3472 = P (100 + 12/100)
⇒ $3472 = P × 112/100
⇒ P × 112/100 = $3472
⇒ P = 3472/112/100
⇒ P = 3472 × 100/112
⇒ P = 3472 × 100/112
⇒ P = 347200/112
⇒ P = $3100
Thus, the sum borrowed (P) = $3100 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 = 3% per annum
Thus, Interest = 3% of principal
⇒ Interest = 3% of 100 = 3
Thus, Simple Interest for 1 year = 3
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 × 3 = 12
Thus, simple interest for 4 years = 12
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 12 = 112
Calculation of the Principal
Now,
∵ If the Amount is 112, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/112
∴ If the Amount is 3472, then the Principal = 100/112 × 3472
= 100 × 3472/112
= 347200/112
= 3100
Thus, Principal = $3100
Thus, the sum borrowed = $3100 Answer
Similar Questions
(1) Find the amount to be paid if David borrowed a sum of $5400 at 9% simple interest for 8 years.
(2) What amount does Linda have to pay after 6 years if he takes a loan of $3350 at 9% simple interest?
(3) David took a loan of $4800 at the rate of 8% simple interest per annum. If he paid an amount of $7488 to clear the loan, then find the time period of the loan.
(4) Find the amount to be paid if William borrowed a sum of $5500 at 6% simple interest for 7 years.
(5) Calculate the amount due after 10 years if Karen borrowed a sum of $5950 at a rate of 8% simple interest.
(6) What amount does James have to pay after 5 years if he takes a loan of $3000 at 10% simple interest?
(7) Calculate the amount due if Richard borrowed a sum of $3600 at 3% simple interest for 3 years.
(8) Calculate the amount due if Jessica borrowed a sum of $3750 at 9% simple interest for 3 years.
(9) How much loan did William borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6050 to clear it?
(10) Find the amount to be paid if Robert borrowed a sum of $5100 at 3% simple interest for 8 years.