Question 1

You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate

Accepted Answer

1. To find the interest, subtract the principal from the balance. $618 - $600 = $18 2.Use the simple interest formula and solve for r. I = Prt 18= 600 x r x (1/2) r= 0.06 =6%

Question 2

What is the sum which earned interest? I. The total simple interest was Rs. 7000 after 7 years. II. The total of sum and simple interest was double of the sum after 5 years.

Accepted Answer

Let the sum be Rs. x. I gives, S.I. = Rs. 7000 and T = 7 years. II gives, Sum + S.I. for 5 years = 2 x Sum Sum = S.I. for 5 years. Now, S.I. for 7 years = Rs. 7000. therefore, S.I. for 1 year = Rs. 1000. Thus, I and II both are needed to get the answer.

Question 3

Find: S.l on Rs 68000 at 1623 1 % per annum for 9 months

Accepted Answer

P = 68000, R = 50 3 % & T = 9 months (3/4 years) S . I = p × r × t 100 = ( 6800 × 50 3 × 3 4 ) 100 = R s . 8500

Question 4

What percentage of simple interest per annum did Anand pay to Deepak? I. Anand borrowed Rs. 8000 from Deepak for four years. II. Anand returned Rs. 8800 to Deepak at the end of two years and settled the loan

Accepted Answer

Let the rate be R% p.a. I gives, P = Rs. 8000 and T = 4 years. II gives, S.I = Rs. (8800 - 8000) = Rs. 800. R = [100 x S.I] / [p x t ]= (100 x 800)/(8000 x 4) = 2 ½ % p.a Thus, I and II both are needed to get the answer.

Question 5

What is the rate of simple interest? I. The total interest earned was Rs. 4000. II. The sum was invested for 4 years.

Accepted Answer

We know that, R = (100 x S.I) / (P x T) Now I gives, S.I = Rs. 4000. II gives, T = 4 years. But, P is unknown. So, we cannot find R. So, given data is insufficient to get R.

Question 6

At the beginning of March, Ryan had $621 in his savings bank account. On 10 March he deposited $60. If the bank pays 8% p.a. interest paid monthly and calculated on the minimum monthly balance, calculate the interest Ryan earns in March.

Accepted Answer

I = (P x T x R) /100

Question 7

Jaclyn buys $50 000 worth of debentures in a company. She earns 9.5% p.a. simple interest, paid to her quarterly (that is, every 3 months). If the agreed period of the debenture was 18 months: calculate the total amount collected at the end of the t…

Accepted Answer

total interest=1187.50*6

Question 8

Car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly instalments. Interest is charged at 12% p.a. What is the total cost of the car?

Accepted Answer

Total cost = deposit + instalment amount × number of instalments

Question 9

Jason decides to borrow money for a holiday. If a personal loan is taken over 4 years with equal quarterly repayments at 12% p.a. flat rate (simple interest), calculate the effective rate of interest.

Accepted Answer

Flat rate = 12% n = 4 × 4 = 16 Effective rate =2n/(n+1) × flat rate

Simple Interest Questions