Simple Interest problems
- 1. Simple interest on a certain sum of money for 3 years at 14% per annum is half the compound interest on Rs. 10000 for 2 years at 10% per annum. The sum placed on simple interest is
Options- A. Rs 5000
- B. Rs 1250
- C. Rs 2000
- D. Rs 2500 Also asked in: Bank Exams
Correct Answer: Rs 2500
- 2. You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate
Options- A. 6%
- B. 5%
- C. 7%
- D. 8% Also asked in: GRE, Bank PO
Correct Answer: 6%
Explanation:
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%
- 3. 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.
Options- A. I alone sufficient while II alone not sufficient to answer
- B. II alone sufficient while I alone not sufficient to answer
- C. Either I or II alone sufficient to answer
- D. Both I and II are necessary to answer Also asked in: GRE, Bank PO
Correct Answer: Both I and II are necessary to answer
Explanation:
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.
- 5. 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
Options- A. I alone sufficient while II alone not sufficient to answer
- B. II alone sufficient while I alone not sufficient to answer
- C. Either I or II alone sufficient to answer
- D. Both I and II are necessary to answer Also asked in: Bank Exams, Bank PO
Correct Answer: Both I and II are necessary to answer
Explanation:
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.
- 6. What is the rate of simple interest? I. The total interest earned was Rs. 4000. II. The sum was invested for 4 years.
Options- A. I alone sufficient while II alone not sufficient to answer
- B. II alone sufficient while I alone not sufficient to answer
- C. Either I or II alone sufficient to answer
- D. Both I and II are not sufficient to answer Also asked in: Bank Exams, Bank PO
Correct Answer: Both I and II are not sufficient to answer
Explanation:
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.
- 7. 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.
Options- A. 2.14
- B. 3.14
- C. 5.14
- D. 4.14 Also asked in: Bank Exams, Bank PO
Correct Answer: 4.14
Explanation:
I = (P x T x R) /100
- 8. 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 term.
Options- A. 8125
- B. 9125
- C. 7125
- D. 6125 Also asked in: Bank Exams, Bank PO
Correct Answer: 7125
Explanation:
total interest=1187.50*6
- 9. 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?
Options- A. 30.240
- B. 31.240
- C. 33.240
- D. 32,240 Also asked in: Bank Exams, Bank PO
Correct Answer: 32,240
Explanation:
Total cost = deposit + instalment amount × number of instalments
- 10. 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.
Options- A. 22,588
- B. 32.588
- C. 42.588
- D. 43.588 Also asked in: Bank Exams, Bank PO
Correct Answer: 22,588
Explanation:
Flat rate = 12%
n = 4 × 4
= 16
Effective rate =2n/(n+1) × flat rate
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