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 Simple Interest Questions

Popular Latest Rated Important Formulae

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:

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?

A) 1:3 B) 1:4
C) 2:3 D) data is inadequate
 
Answer & Explanation Answer: C) 2:3

Explanation:

Let the principal be P and rate of interest be R%.

 

Required ratio =P*R*6100P*R*9100=6PR9PR=69=23

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14 12961
Q:

The simple interest on a sum of money will be Rs.600 after 10 years. If the principal is trebled after 5 years what will be the total interest at the end of the tenth year ?

A) Rs. 1100 B) Rs. 1200
C) Rs. 1000 D) Rs. 1840
 
Answer & Explanation Answer: B) Rs. 1200

Explanation:

P --- 10 ----- 600 

  P --- 5 ----- 300

3P --- 5 ----- 900
                __________
                   1200

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24 12907
Q:

An automobile financier claims to be lending money at S.I., but he includes the interest every six months for calculating the principal. If he is charging an interest of 8%, the effective rate of interest becomes ?

A) 10.25 % B) 8.16 %
C) 9.63 % D) 0.16 %
 
Answer & Explanation Answer: B) 8.16 %

Explanation:

Let the sum be Rs. 100. Then,
S.I. for first 6 months = (100 x 8 x 1) / (100 x 2) = Rs. 4
S.I. for last 6 months = (104 x 8 x 1) / (100 x 2) = Rs. 4.16
So, amount at the end of 1 year = (100 + 4 + 4.16) = Rs. 108.16
Effective rate = (108.16 - 100) = 8.16%.

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4 12518
Q:

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

A) 3.5 years B) 4 years
C) 4.5 years D) 5 years
 
Answer & Explanation Answer: B) 4 years

Explanation:

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

= 4 years.

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11 12139
Q:

In what time will Rs. 1860 amount to Rs. 2641.20 at simple interest 12% per annum?

A) 2.9 years B) 3.5 years
C) 4.2 years D) 4.7 years
 
Answer & Explanation Answer: B) 3.5 years

Explanation:

Given that Rs. 1860 will become Rs. 2641.20 at 12%

 

=> Simple Interest = 2641.20 - 1860 = Rs. 781.20

 

We know I = PTR/100

 

=> 781.20 x 100 = 1860 x T x 12

 

=> T = 78120/1860x12

 

=> T = 78120/22320

 

=> T = 3.5 years.

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30 11465
Q:

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

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
 
Answer & Explanation Answer: D) 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.

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2 10912
Q:

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:

A) 10% B) 10.25%
C) 10.5% D) none of these
 
Answer & Explanation Answer: B) 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%

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14 10870
Q:

Reena took a loan of Rs. 1200 with simple interest for as many years as the rate of Interest. If she paid Rs. 432 as interest at the end of the loan period, what was the rate of interest?

A) 3.6 B) 6
C) 18 D) cannot be determined
 
Answer & Explanation Answer: B) 6

Explanation:

Let rate = R% and time = R years.

 

Then, 1200×R×R100=432

 12R2=432

 

=> R = 6.

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6 10602