Simple Interest Questions

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:

Simple interest on a certain sum is 16/25 of the sum. Find the rate percent and time, If both are numerically equal.

A) Rate = 7% and Time = 7 years. B) Rate = 8% and Time = 8 years.
C) Rate = 6% and Time = 6 years. D) Rate = 5% and Time = 5 years.
 
Answer & Explanation Answer: B) Rate = 8% and Time = 8 years.

Explanation:

Let sum = X. Then S.I = 16x/25

 

Let rate = R% and Time = R years.

 

Therefore,  (x * R * R)/100 = 16x/25   =>  R = 40/5 = 8

 

Therefore, Rate = 8% and Time = 8 years.

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111 38931
Q:

A sum of Rs.1550 was lent partly at 8% p.a. simple interest. The total interest received after 3 years was Rs.300. The ratio of the money lent at 5% to that lent at 8% is :

A) 5:8 B) 6:7
C) 16:15 D) 17:18
 
Answer & Explanation Answer: C) 16:15

Explanation:

let the sum lent at 5% be Rs.x and that lent at 8% be Rs.(1550-x). then, 

 

Interest on x at 5% for 3 years + interest on (1550-x) at 8% for 3 years = 300

 

 x*5*3100+1500-x*8*3100=300 

 

 x=800

 

Required ratio =  x : (1550-x) = 800 : (1550-800) = 800 : 750 = 16 : 15

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72 35079
Q:

In how many years will a sum of Rs.800 at 10% per annum compounded semi annually become Rs.926.10

A) 1.5 B) 2.5
C) 3.5 D) 4.5
 
Answer & Explanation Answer: A) 1.5

Explanation:

Let the time be 'n' years, Then

 

800×1+51002n=926.10 <=> 1+51002n=92618000<=>21202n=21103

 

n = 3/2 or n= 112 Years 

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126 34903
Q:

At what rate of compound interest per annum will a sum of rs.1200 becomes rs.1348.32 in 2 years

A) 66%% B) 6.5%
C) 7% D) 7.5%
 
Answer & Explanation Answer: A) 66%%

Explanation:

rate=r%

1200 (1+r/100)^2=1348.32

r=6%

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42 31985
Q:

A certain amount earns simple interest of Rs. 1750 after 7 years. Had the interest been 2% more, how much more interest would it have earned?

A) Rs.35 B) Rs.245
C) Rs.350 D) cannot be determined
 
Answer & Explanation Answer: D) cannot be determined

Explanation:

We need to know the S.I, principal and time to find the rate. Since the principal is not given, so data is inadequate.

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64 30813
Q:

A father left a will of Rs.35 lakhs between his two daughters aged 8.5 and 16 such that they may get equal amounts when each of them reach the age of 21 years. The original amount of Rs.35 lakhs has been instructed to be invested at 10% p.a. simple interest. How much did the elder daughter get at the time of the will?

A) 17.5 lakhs B) 21 lakhs
C) 15 lakhs D) 20 lakhs
 
Answer & Explanation Answer: B) 21 lakhs

Explanation:

Let Rs.x be the amount that the elder daughter got at the time of the will. Therefore, the younger daughter got (3,500,000 - x).

 

The elder daughter’s money earns interest for (21 - 16) = 5 years @ 10% p.a simple interest.

 

The younger daughter’s money earns interest for (21 - 8.5) = 12.5 years @ 10% p.a simple interest.

 

As the sum of money that each of the daughters get when they are 21 is the same,

 

 x+5*10*x100=3,500,000-x+12.5*10*3,500,000-x100

 

 x+50x=3,500,000-x+125100*3,500,000-125x100

 

 2x+50x100+125x100=3,500,000*1+54

 

 200x+50x+125x100=94*3,500,000

 

 =>x=2,100,000=21 lakhs

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54 28226
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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35 27771
Q:

Find: S.l. on Rs 6250 at 14% per annum for 146 days.

A) Rs.350 B) Rs.450
C) Rs.550 D) Rs.650
 
Answer & Explanation Answer: A) Rs.350

Explanation:

 

P = Rs. 6250, R = 14 %  & T = (146/365) years = 2/5 years .

 S.I=Rs.6250*14*25100=Rs.350

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65 26115