Question 1

How long will it take $3000 to earn $60 interest at 6%?

Accepted Answer

t=I/pr

Question 2

A merchant receives an invoice for a motor boat for $20 000 with terms 4/30, n/100. What is the highest simple interest rate at which he can afford to borrow money in order to take advantage of the discount?

Accepted Answer

Suppose the merchant will take advantage of the cash discount of 4% of $20 000 = $800 by paying the bill within 30 days from the date of invoice. He needs to borrow $20 000 = $800 = $19 200. He would borrow this money on day 30 and repay it on day 100 (the day the original invoice is due) resulting in a 70-day loan. The interest he should be willing to pay on borrowed money should not exceed the cash discount $800. r=I/pt=21.73% The highest simple interest rate at which the merchant can afford to borrow money is 21.73%. This is a break-even rate. If he can borrow money, say at a rate of 15%, he should do so. He would borrow $19 200 for 70 days at 15%. Maturity value of the loan is $19 200(1+0.15(70/365))=$19 752.33 savings would be $20 000 − $19 752.33 = $247.67

Question 3

Find the principal which yields $25,000 when invested at 3% annually for 20 years.

Accepted Answer

P = F 1 + i n

Question 4

Question : What is the sum which earned interest ? Statements : a. The total simple interest was Rs. 9000 after 9 years. b. The total of sum and simple interest was double of the sum after 6 years.

Accepted Answer

Let the sum be Rs. x a. gives, S.I = Rs. 9000 and time = 9 years. b. gives, Sum + S.I for 6 years = 2 x Sum --> Sum = S.I for 6 years. Now, S.I for 9 years = Rs. 9000 S.I for 1 year = Rs. 9000/9 = Rs. 1000. S.I for 6 years = Rs. (1000 x 6)= Rs. 6000. --> x = Rs. 6000 Thus, both a and b are necessary to answer the question.

Question 5

An amount doubles itself in 15 years. what is the rate of interest ?

Accepted Answer

Let the principle be Rs. P As the amount double itself the interest is Rs. P too So P = P x r x 15/100 => r = 100/15 = 20/3 % = 6.66 %.

Question 6

Althaf borrows Rs. 1500 from two moneylenders. He pays interest at the rate of 12% per annum for one loan and at the rate of 14% per annum for the other. The total interest he pays for the entire year is Rs. 186. How much does he borrow at the rate …

Accepted Answer

Let Althaf lent Rs. A at 14% per year. Hence, Money lent at 12% = (1500-A); Given, total interest = Rs. 186. {(A x 14x 1)/100} + {[(1500-A) x 12 x 1/100]} = 186; 14A/100 + (18000 -12A)/100 = 186; 14A + 18000 - 12A = 186x100; 2A = 18600-18000; A = 600/2 = Rs. 300. Hence, money lent at 12% = 1500-300 = Rs. 1200.

Question 7

Raghu has invested Rs. 1000 and received Rs. 1300 at 6% per annum simple interest after X years. Find thevalue of X.

Accepted Answer

5 years

Question 8

A man lent a sum of money at the rate of simple interest of 4%. If the interest for 8 years is Rs 340 less than the principal, the principal is

Accepted Answer

Rate = 4% Time = 8 years Simple Interest = PTR/100 = 32P/100 Given, P –32P/100 = 34068 P = 34000 P = 500

Question 9

A sum was invested for 3 years at simple interest at a certain rate. Had it been invested at 4% higher rate of interest, it would have fetched Rs 600 more. The sum is

Accepted Answer

Let the rate of interest be R (Interest at rate (R+4)%)–(Interest at R%) = 600(PT(R+4)/100) –(PTR/100) = 6003PR +12P –3PR = 60000 12P = 60000 P = 5000

Question 10

How much simple interest will Rs. 4000 earn in 18 months at 12% per annum?

Accepted Answer

Rs.720

Question 11

Simple interest on a certain sum of money for 3 years at 10% per annum is half the compound interest on Rs 6000 for 2 years at 10% per annum. The sum placed on simple interest is

Accepted Answer

Rs 2100

Question 12

Each question contains Quantity I and Quantity II. Read the contents clearly and answer your questions accordingly. Quantity I: The Sl on a certain sum of money for 3 years at 5% per annum is Rs 4800. Then the principle is? Quantity II: The Cl on a …

Accepted Answer

Quantity I=15% of Principle=4800 Principle=Rs.32000 Quantity II=12.36% of Principle =3708 Principle=Rs.30000 Hence Quantity I > Quantity II

Question 13

A sum of Rs 8000 is divided into two parts. The simple interest on first part at the rate of 21% per annum is equal to the simple interest on second part at the rate of 35% per annum. What is the interest (in Rs) of each part?

Accepted Answer

1050

Question 14

The interest earned on Rs. 1600 at the rate of 5% S>I per annum for 6 yrs would be:

Accepted Answer

480

Question 15

At 9.5% simple interest per annum a sum of money became Rs. 942 in 6 years. The sum initially invested was:

Accepted Answer

600

Question 16

Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs 1200 for 2 years at 10% per annum. The sum placed on simple interest is

Accepted Answer

Rs 525

Question 17

The difference between the simple interest obtained by investing Rs. 'X' with 8% per annum for an year and by investing Rs. 'X+1400' with 8% per annum for two years is 240 Rs. Find the value of X.

Accepted Answer

[(X+1400)*8*2/100] - [(X*8*1)/100]= 240 0.16X + 14*16 - 0.08X = 240 0.08X = 240 - 224 0.08X = 16 X = Rs. 200

Question 18

The difference between Simple Interest and Compound Interest at the rate of 12% on the same amount for 3 years is Rs. 112.32. What is the principal amount if interest is compounded annually?

Accepted Answer

Rs. 2500

Question 19

What Principal will yield Rs. 120 as Simple Interest at 6% p.a. in 10 years?

Accepted Answer

₹ 200

Question 20

If a person repaid Rs. 22500 after 10 years of borrowing a loan, at 10% per annum simple interest find out what amount did he take as a loan?

Accepted Answer

SI = PTR/100 SI = PX100/100 SI = P So, Amount=P+SI=2P→22500 = 2P→P = 11250

Simple Interest Questions