Question:
If Daniel paid $4592 to settle his loan which he had taken 4 years before at a simple interest of 3%, then find the loan taken.
Correct Answer
$4100
Solution And Explanation
Solution
Given,
Amount (A) = $4592
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
$4592 = P (1 + 3% × 4)
⇒ $4592 = P (1 + 3/100 × 4)
⇒ $4592 = P (1 + 3 × 4/100)
⇒ $4592 = P (1 + 12/100)
⇒ $4592 = P (100 + 12/100)
⇒ $4592 = P × 112/100
⇒ P × 112/100 = $4592
⇒ P = 4592/112/100
⇒ P = 4592 × 100/112
⇒ P = 4592 × 100/112
⇒ P = 459200/112
⇒ 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 = 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 4592, then the Principal = 100/112 × 4592
= 100 × 4592/112
= 459200/112
= 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 8% simple interest for 8 years.
(2) How much loan did Sarah borrow 5 years ago at a rate of simple interest 2% per annum, if he paid $6435 to clear it?
(3) John took a loan of $4400 at the rate of 9% simple interest per annum. If he paid an amount of $6776 to clear the loan, then find the time period of the loan.
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 6% simple interest?
(5) What amount will be due after 2 years if Anthony borrowed a sum of $3650 at a 9% simple interest?
(6) Find the amount to be paid if Richard borrowed a sum of $5600 at 6% simple interest for 8 years.
(7) If Patricia paid $3780 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(8) Calculate the amount due if Patricia borrowed a sum of $3150 at 6% simple interest for 3 years.
(9) If Charles paid $4680 to settle his loan which he had taken 4 years before at a simple interest of 5%, then find the loan taken.
(10) What amount does Susan have to pay after 6 years if he takes a loan of $3650 at 9% simple interest?