Question:
If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
Correct Answer
$3050
Solution And Explanation
Solution
Given,
Amount (A) = $3538
Rate of Simple Interest (R) = 4%
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
$3538 = P (1 + 4% × 4)
⇒ $3538 = P (1 + 4/100 × 4)
⇒ $3538 = P (1 + 4 × 4/100)
⇒ $3538 = P (1 + 16/100)
⇒ $3538 = P (100 + 16/100)
⇒ $3538 = P × 116/100
⇒ P × 116/100 = $3538
⇒ P = 3538/116/100
⇒ P = 3538 × 100/116
⇒ P = 3538 × 100/116
⇒ P = 353800/116
⇒ 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 = 4% per annum
Thus, Interest = 4% of principal
⇒ Interest = 4% of 100 = 4
Thus, Simple Interest for 1 year = 4
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 × 4 = 16
Thus, simple interest for 4 years = 16
Thus, Amount (A) = Principal + Interest
⇒ Amount = 100 + 16 = 116
Calculation of the Principal
Now,
∵ If the Amount is 116, then the Principal = 100
∴ If the Amount is 1, then the Principal = 100/116
∴ If the Amount is 3538, then the Principal = 100/116 × 3538
= 100 × 3538/116
= 353800/116
= 3050
Thus, Principal = $3050
Thus, the sum borrowed = $3050 Answer
Similar Questions
(1) Calculate the amount due if Michael borrowed a sum of $3300 at 3% simple interest for 3 years.
(2) Calculate the amount due if Jessica borrowed a sum of $3750 at 10% simple interest for 3 years.
(3) Find the amount to be paid if Barbara borrowed a sum of $5550 at 3% simple interest for 7 years.
(4) Jennifer had to pay $3542.5 in order to furnish the loan taken 3 years before. If the rate of simple interest was 3% then find the sum borrowed.
(5) Find the amount to be paid if William borrowed a sum of $5500 at 10% simple interest for 8 years.
(6) Find the amount to be paid if Patricia borrowed a sum of $5150 at 6% simple interest for 7 years.
(7) Find the amount to be paid if William borrowed a sum of $5500 at 9% simple interest for 8 years.
(8) Daniel took a loan of $6200 at the rate of 10% simple interest per annum. If he paid an amount of $11780 to clear the loan, then find the time period of the loan.
(9) Calculate the amount due if Elizabeth borrowed a sum of $3450 at 9% simple interest for 4 years.
(10) What amount does David have to pay after 6 years if he takes a loan of $3400 at 5% simple interest?