# 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)  $S.I=\left(\frac{P×T×R}{100}\right)$

(ii)

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%

Explanation:

(1500 x R1 x 3)/100

=> 4500 (R1-R2) = 1350

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

49 23125
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

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.

24 21506
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%

Explanation:

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

Rate = $100*300012500*4$ % = 6%

20 21207
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

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

35 21096
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 %

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 %.

22 20775
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

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

17 20518
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

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.

31 20313
Q:

The interest on a certain deposit at 4.5% p.a. is Rs. 202.50 in one year. How much will the additional interest in one year be on the same deposit at 5% p.a.  ?

 A) Rs. 22.5 B) Rs. 2.5 C) Rs. 202 D) Rs. 25