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:

The simple interest on a certain sum of money invested at a certain rate for 2 years amounts to Rs. 1200. The compound interest on the same sum of money invested at the same rate of interest for 2 years amounts to Rs. 1290. What was the principal?

A) Rs. 12000 B) Rs. 16000
C) Rs. 6000 D) Rs. 4000
 
Answer & Explanation Answer: D) Rs. 4000

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Q:

Ms. Kavitha borrowed Rs. 950 at 6% per annum simple interest. What amount will she pay to clear her debt after 4 years?

A) 282 B) 1187
C) 1178 D) 228
 
Answer & Explanation Answer: C) 1178

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Q:

Ms. Alina borrowed Rs.650 at 6% per annum simple interest. What amount will she pay to clear her debt after 4 years?

A) Rs. 165 B) Rs. 860
C) Rs. 806 D) Rs. 156
 
Answer & Explanation Answer: C) Rs. 806

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Q:

The interest earned on Rs. 3675 at the rate of 4% simple interest per annum for 2 years will be

A) Rs. 294 B) Rs. 289.50
C) Rs. 292 D) Rs. 288.50
 
Answer & Explanation Answer: A) Rs. 294

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Q:

The effective annual rate of interest corresponding to a nominal rate of 19% per annum payable half­yearly is:

A) 38 percent B) 19.9 percent
C) 39.81 percent D) 19 percent
 
Answer & Explanation Answer: B) 19.9 percent

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Q:

Two equal sum are invested in two different schemes. One scheme gives simple interest and the other gives compound interest (annual compounding).The sum of interest obtained after 2 years from both the schemes is Rs 3717. If both scheme have 13% per annum interest rate, then what is the first year interest (in Rs) for simple interest scheme?

A) 900 B) 1200
C) 1500 D) 600
 
Answer & Explanation Answer: A) 900

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Q:

Manish lent out Rs 20000 in two parts. He put out first part at 6% and the second part at 8% interest. The yearly average interest comes out to be 6.4%.What are the amounts (in Rs) that were lent at 6% and 8% respectively?

 

A) 16000, 4000 B) 12000, 8000
C) 15000, 5000 D) 18000, 2000
 
Answer & Explanation Answer: A) 16000, 4000

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Q:

A sum of money of Rs. 1000 is lent out in two parts in such a way that the interest on one part at 10% per annum for 5 years is equal to another at 5% for 10 years. Calculate the sum lent out at 5%.

A) Rs. 500 B) Rs. 800
C) Rs. 1000 D) Rs. 1200
 
Answer & Explanation Answer: A) Rs. 500

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