# 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:

At what rate percent per annum will a sum of money double in 8 years.

 A) 12.5% B) 13.5% C) 11.5% D) 14.5%

Explanation:

Let principal = P, Then, S.I.= P and Time = 8 years

We know that S.I. = PTR/100

Rate = [(100 x P)/ (P x 8)]% = 12.5% per annum.

120 32117
Q:

A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is:

 A) 650 B) 690 C) 698 D) 700

Explanation:

S.I. for 1 year =  Rs. (854 - 815) = Rs. 39.

S.I. for 3 years = Rs.(39 x 3) = Rs. 117.

Principal = Rs. (815 - 117) = Rs. 698

92 30793
Q:

What annual instalment will discharge a debt of Rs 1092 due in 3 years at 12% simple interest?

 A) Rs.325 B) Rs.545 C) Rs.560 D) Rs.550

Explanation:

Let each instalment be Rs.x .

1st year =  [x + (x * 12 * 2)/100]

2nd year = [ x + (x *12 * 1)/100]

3rd year = x

Then, [x + (x * 12 * 2)/100] + [ x + (x *12 * 1)/100] + x =1092

3x + ( 24x/100 ) + ( 12x/100 )  = 1092

336x =109200

Therefore, x = 325

Each instalment = Rs. 325

83 25708
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

Explanation:

Let the time be 'n' years, Then

n = 3/2 or n= 1$12$ Years

71 22685
Q:

A man took loan from a bank at the rate of 12% p.a. simple interest. After 3 years he had to pay Rs. 5400 interest only for the period. The principal amount borrowed by him was:

 A) Rs.2000 B) Rs.10000 C) Rs.15000 D) Rs.20000

Explanation:

Principal =

34 20708
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.

32 19731
Q:

A certain sum of money amounts to Rs 1008 in 2 years and to Rs 1164 in 3 ½  years. Find the sum and the rate of interest.

 A) 800, 14% B) 800, 13% C) 800, 12% D) 800, 19%

Explanation:

S.I. for 1 ½ years = Rs (1164 - 1008) = Rs 156 .

S.I. for 2 years = Rs (156 x $23$ x 2)= Rs 208.

Therefore, Principal = Rs (1008 - 208) = Rs 800.

Now, P = 800, T= 2 and S.I. = 208.

Therefore, Rate = (100 x S.I.) / (P x T) = [ (100 x 208)/(800 x 2)]% = 13%

37 17958
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

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