Simple Interest problems
- 1. An automobile financier claims to be lending money at simple interest, but he includesthe interest every six months for calculating the principal. If he is charging an interest of10%, the effective rate of interest becomes:
Options- A. 10%
- B. 10.25%
- C. 10.5%
- D. none of these Also asked in: GRE
Correct Answer: 10.25%
Explanation:
Let the sum be Rs. 100. Then,
S.I. for first 6 months = Rs.[ (100 x 10 x 1)/(100 x 2) ]= Rs.5
S.I. for last 6 months =Rs.[(102 x 10 x 1)/(100 x 2) ] = Rs.5.25
So, amount at the end of 1 year = Rs. (100 + 5 + 5.25) = Rs. 110.25
Effective rate = (110.25 - 100) = 10.25%
- 2. What will be the ratio of simple interest earned by certain amount at the same rate of interest for 6 years and that for 9 years?
Options- A. 1:3
- B. 1:4
- C. 2:3
- D. data is inadequate Also asked in: GRE
Correct Answer: 2:3
Explanation:
Let the principal be P and rate of interest be R%.
Required ratio =
- 3. Rs.1500 is divided into two parts such that if one part is invested at 6% and the other at 5% the whole annual interest from both the sum is Rs.85. How much was lent at 5% ?
Options- A. Rs. 500
- B. Rs. 245
- C. Rs. 1250
- D. Rs. 635 Also asked in: AIEEE, Bank Exams, CAT, GATE, Bank Clerk, Bank PO
Correct Answer: Rs. 500
Explanation:
(kx5x1)/100 + [(1500 - k)x6x1]/100 = 85
5k/100 + 90 ? 6k/100 = 85
k/100 = 5
=> k = 500
- 4. A sum of money becomes 7/6 of itself in 3 years at a certain rate of simple interest. The rate per annum is ?
Options- A. 45/7 %
- B. 50/9 %
- C. 51/7 %
- D. 47/ 9 % Also asked in: AIEEE, Bank Exams, CAT, GATE, Bank Clerk, Bank PO
Correct Answer: 50/9 %
Explanation:
Let sum = S. Then, amount = 7S/6
S.I. = 7S/6 - S = S/6; Time = 3 years.
Rate = (100 x S) / (S x 6 x 3) = 5 5/9 = 50/9 %.
- 5. Manu invested an amount of Rs. 14800 at the rate of 7% per annum. After how many years will she obtain a simple interest of Rs.15800?
Options- A. 16.75 yrs
- B. 15.25 yrs
- C. 14 yrs
- D. 13.5 yrs Also asked in: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO
Correct Answer: 15.25 yrs
Explanation:
We know that,
I = PTR/100
ATQ,
15800 = 14800 x T x 6/100
T = 15800/148x7
T = 15800/1036
T = 15.25 yrs.
- 6. A sum of money invested for a certain number of years at 8% p.a. simple interest grows to Rs.180. The same sum of money invested for the same number of years at 4% p.a. simple interest grows to Rs.120 only. For how many years was the sum invested?
Options- A. 25years
- B. 15years
- C. 20years
- D. 22years Also asked in: Bank Exams, Bank PO
Correct Answer: 25years
Explanation:
From the information provided we know that,
Principal + 8% p.a. interest on principal for n years = 180 ??.. (1)
Principal + 4% p.a. interest on principal for n years = 120 ??? (2)
Subtracting equation (2) from equation (1), we get
4% p.a. interest on principal for n years = Rs.60.
Now, we can substitute this value in equation (2),
i.e Principal + 60 = 120
= Principal = Rs.60.
We know that SI = , where p is the principal, n the number of years and r the rate percent of interest.
In equation (2), p = Rs.60, r = 4% p.a. and the simple interest = Rs.60.
Therefore, 60 =(60*n*4)/100
=> n = 100/4 = 25 years.
- 7. On Rs. 3500 invested at a simple interest rate of 7 per cent per annum, Rs. 500 is obtained as interest in certain years. In order to earn Rs. 800 as interest on Rs. 4900 in the same number of years, what should be the rate of simple interest?
Options- A. 8%
- B. 7.5%
- C. 9%
- D. 8.5% Also asked in: AIEEE, Bank Exams, CAT, GATE, Analyst, Bank Clerk, Bank PO
Correct Answer: 8%
Explanation:
From the given data,
3500x7xt/100 = 500
=> t = 100/49 years
Now, in the second case
The interest per year = 49/100 x 800 = 392
=> 4900 x 1 x r/100 = 392
=> r = 8%
- 8. A Rent Rs. 5000 to B for 2 years and Rs. 3000 to C for 4 years on simple interest at the same rate of interest and received Rs. 2200 in all from both of them as interest. The rate of interest per annum is:
Options- A. 5%
- B. 7%
- C. 7.5%
- D. 10% Also asked in: GRE, Bank PO
Correct Answer: 10%
Explanation:
Let the rate be R% p.a.
Then,
Rate = 10%
- 9. What is the principal sum? I. The sum amounts to Rs. 690 in 3 years at S.I. II. The sum amounts to Rs. 750 in 5 years at S.I. III. The rate of interest is 5% p.a.
Options- A. I and III only
- B. II and III only
- C. I and II only
- D. Any two of the three Also asked in: Bank Exams, Bank PO
Correct Answer: Any two of the three
Explanation:
Clearly, any of the three will give us the answer
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