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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:

A sum of Rs. 725 is lent in the beginning of a year at a certain rate of interest. After 8 months, a sum of Rs. 362.50 more is lent but at the rate twice the former. At the end of the year, Rs. 33.50 is earned as interest from both the loans. What was the original rate of interest?

A) 3.46% B) 4.5%
C) 5% D) 6%
 
Answer & Explanation Answer: A) 3.46%

Explanation:

Let the original rate be R%. Then, new rate = (2R)%.

 

Note: Here, original rate is for 1 year(s); the new rate is for only 4 months i.e.1/3 year(s).

 725*R*1100+362.50*2R*1100*3=33.50

 

=> (2175 + 725) R = 33.50 x 100 x 3

 

=>  (2175 + 725) R = 10050

 

=>  (2900)R = 10050

 

 => R=100502900=3.46

 

Original rate = 3.46%

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37 27830
Q:

A sum of money becomes 7/6 of itself in 3 years at a certain rate of simple interest. The rate per annum is ?

A) 45/7 % B) 50/9 %
C) 51/7 % D) 47/ 9 %
 
Answer & Explanation Answer: B) 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 %.

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26 27223
Q:

A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at the rate of simple interest. What is the rate of interest

A) 3% B) 4%
C) 5% D) 6%
 
Answer & Explanation Answer: D) 6%

Explanation:

S.I. = Rs. (15500 - 12500) = Rs. 3000.

 

Rate = 100*300012500*4 % = 6%

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Q:

The difference between the simple interest received from two different sources on Rs.1500 for 3 years is Rs.13.50. The difference between their rates of interest is

A) 0.1% B) 0.2%
C) 0.3% D) 0.4%
 
Answer & Explanation Answer: C) 0.3%

Explanation:

(1500 x R1 x 3)/100 

=> 4500 (R1-R2) = 1350 

=> (R1-R2)= 1350/4500 = 0.3 %

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Q:

A man borrowed Rs 24000 from two money lenders. For one loan, he paid 15% per annum and for the other 18% per annum. At the end of one year, he paid Rs 4050. How much did he borrow at each rate ?

A) Rs.16000 B) Rs.12000
C) Rs.15000 D) Rs.13000
 
Answer & Explanation Answer: C) Rs.15000

Explanation:

Let the sum at 15% be Rs x and that at 18% be Rs (24000 - x).

{(x * 15 * 1)/100 } + { [(24000 – x) * 18 * 1]/100 } = 4050

or 15 x + 432000 - 18x = 405000 or x = 9000.

Money borrowed at 15% = Rs 9000 .

Money borrowed at 18% = Rs 15000.

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25 23017
Q:

A sum was put at simple interest at a certain rate for 10 years . Had it been put at 5% higher rate , it would have fetched Rs.600 more. What was the Sum?

A) Rs.1200 B) Rs.1300
C) Rs.1400 D) Rs.1500
 
Answer & Explanation Answer: A) Rs.1200

Explanation:

At 5% more rate, the increase in S.I for 10 years = Rs.600  (given)

So, at 5% more rate, the increase in SI for 1 year = 600/10 = Rs.60/-

i.e. Rs.60 is 5% of the invested sum

So, 1% of the invested sum = 60/5

Therefore, the invested sum = 60 × 100/5 = Rs.1200

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Q:

A Certain sum of money an amounts to Rs 2500 in a span Of 5 years and further to Rs.3000 in a span of 7 years at simple interest The sum is ?

A) Rs. 1800 B) Rs. 2000
C) Rs. 1400 D) Rs. 1250
 
Answer & Explanation Answer: D) Rs. 1250

Explanation:

2500 in 5th year and 3000 in 7th year
So in between 2 years Rs. 500 is increased => for a year 500/2 = 250
So, per year it is increasing Rs.250 then in 5 years => 250 x 5 = 1250
Hence, the initial amount must be 2500 - 1250 = Rs. 1250

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16 22128
Q:

How long will it take for a sum of money to grow from Rs.1250 to Rs.10,000, if it is invested at 12.5% p.a simple interest?

A) 65years B) 56years
C) 45years D) 57years
 
Answer & Explanation Answer: B) 56years

Explanation:

Simple interest is given by the formula SI = (pnr/100), where p is the principal, n is the numberof years for which it is invested, r is the rate of interest per annum

 

In this case, Rs. 1250 has become Rs.10,000.

 

Therefore, the interest earned = 10,000 – 1250 = 8750.

 

8750 = [(1250 x n x 12.5)/100]

 

=> n = 700 / 12.5 = 56 years.

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