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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:

A sum of money invested at simpleinterest triples itself in 8 years. How many times will it become in 20 years time?

A) 8 times B) 7 times
C) 6 times D) 9 times
 
Answer & Explanation Answer: C) 6 times

Explanation:

A = P(1 + rt/100)

So, A= 3P (it becomes triples)

3P = P(1 + 8r/100)→r = 25%

Now, when t = 20

⇒A = P(1 + 25*20/100)

⇒A = P(1+ 5)⇒A = 6P

So, it becomes 6 times.

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Q:

A person got Rs.48 more when he invested a certain sum at compound interest instead of simple interest for two years at 8% p.a. Find the sum  ?

A) Rs.8000 B) Rs.6500
C) Rs.7500 D) Rs.5000
 
Answer & Explanation Answer: C) Rs.7500

Explanation:

p=(d×1002)R2 

Where d is difference, r is rate of interest. 

=> (48 x 100 x 100) / 8 x 8 = Rs.7500

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Q:

A person lends Rs. 1540 for five years and Rs. 1800 for four years. If he gets Rs. 1788 as interest on both amounts, what is the rate of interest ?

A) 14.5% B) 11%
C) 12% D) 10.5%
 
Answer & Explanation Answer: C) 12%

Explanation:

Let the interest rate be r%

We know that,

S.I = PTR/100

=> (1540 x 5 x r)/100  +  (1800 x 4 x r)/100 = 1788

=> r = 178800/14900 = 12%

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Q:

Ronika deposited Rs.7000 which amounted to Rs.9200 after 3 years at simple interest. Had the interest been 2% more. She would get how much ?

A) 9850 B) 9500
C) 9620 D) 9760
 
Answer & Explanation Answer: C) 9620

Explanation:

As the interest rate increases by 2%
=> (7000x3x2)/100 = 420
                                   9200
                                  --------
                                   9620

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Q:

Determine the exact and ordinary simple interest on a 90-day loan of $8000 at 812 %

A) 150$ B) $160
C) $170 D) $180
 
Answer & Explanation Answer: C) $170

Explanation:

Exact interest, I= prt = $8000 × 0.085 × 90/365 = 167.67

 

Ordinary Interest, I= Prt = $8000 x 0.085 x 90/360 = 170

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Q:

A 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 monthly instalment?

A) $503 B) $504
C) $505 D) %506
 
Answer & Explanation Answer: B) $504

Explanation:

Cash price = $21 000

Deposit = 10% × $21 000 = $2100 

Loan amount = $21000 − $2100 = $18900

I=p x r x t/100 

I=11340

Total amount = 18900 + 11340 = $30240

Regular payment = total amount /number of payments

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Q:

Find the simple interest on Rs.600 for 11 months at 5 paisa per month ?

A) Rs. 30 B) Rs. 3.30
C) Rs. 33 D) Rs. 330
 
Answer & Explanation Answer: B) Rs. 3.30

Explanation:

I = (600x11x5)/100 = 330 Paise = Rs. 3.30

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Q:

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?

A) 30.240 B) 31.240
C) 33.240 D) 32,240
 
Answer & Explanation Answer: D) 32,240

Explanation:

Total cost = deposit + instalment amount × number of instalments

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