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 Simple Interest Questions

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FACTS  AND  FORMULAE  FOR  SIMPLE  INTEREST  QUESTIONS

 

 

1. Principal: The money borrowed or lent out for a certain period is called the principal or the sum.

 

2. Interest: Extra money paid for using other's money is called interest

 

3. Simple Interest (S.I.) : If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called simple interest.

Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then,

(i)  S.I=P×T×R100

(ii)  P=100×S.IR×T ; R=100×S.IP×T and T=100×S.IP×R

Q:

At what rate percent per annum will a sum of money double in 8 years.

A) 12.5% B) 13.5%
C) 11.5% D) 14.5%
 
Answer & Explanation Answer: A) 12.5%

Explanation:

Let principal = P, Then, S.I.= P and Time = 8 years

 

We know that S.I. = PTR/100

 

Rate = [(100 x P)/ (P x 8)]% = 12.5% per annum.

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Q:

A man took loan from a bank at the rate of 12% p.a. simple interest. After 3 years he had to pay Rs. 5400 interest only for the period. The principal amount borrowed by him was:

A) Rs.2000 B) Rs.10000
C) Rs.15000 D) Rs.20000
 
Answer & Explanation Answer: C) Rs.15000

Explanation:

Principal = Rs100×540012×3=Rs. 15000

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Q:

How much time will take for an amount of Rs. 450 to yield Rs. 81 as interest at 4.5% per annum of simple interest  ?

A) 4 years B) 2.5 years
C) 3.5 years D) 2 years
 
Answer & Explanation Answer: A) 4 years

Explanation:

Time = (100 x 81) / (450 x 4.5) = 4 years.

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Q:

A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is:

A) 650 B) 690
C) 698 D) 700
 
Answer & Explanation Answer: C) 698

Explanation:

S.I. for 1 year =  Rs. (854 - 815) = Rs. 39.

S.I. for 3 years = Rs.(39 x 3) = Rs. 117.

Principal = Rs. (815 - 117) = Rs. 698

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Q:

A certain sum of money amounts to Rs 1008 in 2 years and to Rs 1164 in 3 ½  years. Find the sum and the rate of interest.

A) 800, 14% B) 800, 13%
C) 800, 12% D) 800, 19%
 
Answer & Explanation Answer: B) 800, 13%

Explanation:

S.I. for 1 ½ years = Rs (1164 - 1008) = Rs 156 . 

S.I. for 2 years = Rs (156 x 23 x 2)= Rs 208. 

Therefore, Principal = Rs (1008 - 208) = Rs 800. 

Now, P = 800, T= 2 and S.I. = 208.

Therefore, Rate = (100 x S.I.) / (P x T) = [ (100 x 208)/(800 x 2)]% = 13%

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Q:

What annual instalment will discharge a debt of Rs 1092 due in 3 years at 12% simple interest?

A) Rs.325 B) Rs.545
C) Rs.560 D) Rs.550
 
Answer & Explanation Answer: A) Rs.325

Explanation:

Let each instalment be Rs.x .

 

1st year =  [x + (x * 12 * 2)/100] 

2nd year = [ x + (x *12 * 1)/100] 

3rd year = x 

Then, [x + (x * 12 * 2)/100] + [ x + (x *12 * 1)/100] + x =1092 

3x + ( 24x/100 ) + ( 12x/100 )  = 1092 

336x =109200

Therefore, x = 325 

Each instalment = Rs. 325

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Q:

A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 614 p.a for 2 years. Find his gain in the transaction per year

A) Rs. 112.50 B) Rs.150.25
C) Rs.167.50 D) Rs.170
 
Answer & Explanation Answer: A) Rs. 112.50

Explanation:

 gain in 2 years =Rs.5000*254*2100-5000*4*2100  

= Rs. (625 - 400) 

= Rs. 225 

 gain in 1 year =Rs.2252=112.50

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Q:

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.

A) Only a is sufficient B) Neither a nor b is sufficient
C) Only b is sufficient D) Both a and b sufficient
 
Answer & Explanation Answer: D) Both a and b sufficient

Explanation:

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.

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