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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 person lends Rs. 300 to A at 4% and Rs.540 to B at 6% for the same time. if the total amount that he gets at the end is Rs. 1032. What is the time?

Answer

Money lent to A+B = (300 + 540) = Rs. 840 


Amount received = Rs. 1032 


Interest received = Rs. 1032 - Rs.840 = Rs. 192


 


Interest on Rs. 300 lent to A for 1 year = 300×1×4100 = Rs. 12 


 


Interest on Rs.540 lent to B for 1 year = 540×6×1100 = Rs. 36 


 


 


Total yearly interest = Rs.(12+36) = Rs.48 


If interest is Rs. 48, time = 1 year 


If interest is Rs. 192, time =  192/48 = 4 years 

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14 5953
Q:

The present of Rs.169 due in 2years at 4% per annum compound interest is

A) Rs.150.50 B) Rs.154.75
C) Rs.156.25 D) Rs.158
 
Answer & Explanation Answer: C) Rs.156.25

Explanation:

Present worth = 169/(1+4/100)^n = 156.25

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4 5737
Q:

You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate

A) 6% B) 5%
C) 7% D) 8%
 
Answer & Explanation Answer: A) 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%

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1 5724
Q:

Rondell's parents borrow $6,300 from the bank for a new car. The interest rate is 6% per year. How much simple interest will they pay if they take 2 years to repay the loan?

A) 556 B) 665
C) 756 D) 856
 
Answer & Explanation Answer: C) 756

Explanation:

I=prt

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3 5708
Q:

The total simple interest earned on a sum of money increases by Rs. 600 when the rate of interest increases by 2% per annum. If the investment was made for 5 years, find the sum of money that was invested ?

A) Rs. 6000 B) Rs. 5550
C) Rs. 7500 D) Rs. 6580
 
Answer & Explanation Answer: A) Rs. 6000

Explanation:

Let the sum invested be Rs. P

Let the rate of interest be R% per annum

=> Interest earned for 5 years = (P x 5 x R/100) = PR/20

Now, given that the interest earned increased by Rs. 600 if the Rate increased to (R+2)%

=> SI = (P x 5 x (R+2))/100 = PR/20 + 10P/100

Hence,

PR/20 + 10P/100 = PR/20 + 600

=> P = 6000

Therefore, the sum invested is Rs. 6000

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13 5482
Q:

Manju borrows Rs.5000 for 2 years at 4% p.a. simple interest from Sudha. She immediately lends it to another person at 6 1⁄4% p.a for 2 years. Find her gain in the transaction per year.

A) Rs. 101 B) Rs. 98.5
C) Rs. 124.3 D) Rs. 112.5
 
Answer & Explanation Answer: D) Rs. 112.5

Explanation:

Manju borrows Rs. 5000 for 2 years at 4% p.a. simple interest 

She also lends it at 6 1⁄4% p.a for 2 years 

=> Total Gain = 6 1/4% − 4% = 2 1/4%

So her gain in the transaction for 1 year

= The simple interest she gets for Rs.5000 for 1 year at 2 1⁄4% per annum

= PTR100=5000×94×1100 = Rs. 112.5/ year.

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19 5302
Q:

Two equal sums were lent, one at the rate of 11% per annum for five years and the other at the rate of 8% per annum for six years, both under simple interest. If the difference in interest accrued in the two cases is Rs 1008. Find the sum?

A) Rs. 14,400 B) Rs. 15,600
C) Rs. 14,850 D) Rs. 15,220
 
Answer & Explanation Answer: A) Rs. 14,400

Explanation:

Let the required Sum = Rs.S

 From the given data,

 1008 = [(S x 11 x 5)/100] - [(S x 8 x 6)/100]

 => S = Rs. 14,400.

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18 5298
Q:

On Rs. 3500 invested at a simple interest rate of 7 per cent per annum, Rs. 500 is obtained as interest in certain years. In order to earn Rs. 800 as interest on Rs. 4900 in the same number of years, what should be the rate of simple interest?

A) 8% B) 7.5%
C) 9% D) 8.5%
 
Answer & Explanation Answer: A) 8%

Explanation:

From the given data,

3500x7xt/100 = 500

=> t = 100/49 years

Now, in the second case

The interest per year = 49/100 x 800 = 392

 => 4900 x 1 x r/100 = 392

=> r = 8%

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10 5282