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 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%
 
Answer & Explanation Answer: C) 0.3%

Explanation:

(1500 x R1 x 3)/100 

=> 4500 (R1-R2) = 1350 

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

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45 20946
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
 
Answer & Explanation Answer: A) Rs.1200

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

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33 19099
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
 
Answer & Explanation Answer: B) 56years

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.

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25 17046
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
 
Answer & Explanation Answer: C) Rs.15000

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.

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20 16942
Q:

A sum of money amounts to Rs. 9800 after 5 years and Rs. 12005 after 8 years at the same rate of simple interest. The rate of interest per annum is:

A) 5% B) 8%
C) 12% D) 15%
 
Answer & Explanation Answer: C) 12%

Explanation:

 

S.I. for 3 years = Rs. (12005 - 9800) = Rs. 2205.

 

S.I. for 5 years = Rs.22053×5= Rs.3675

 

Principle = Rs.(9800-3675) = Rs.6125

 

Hence, Rate = 100×36756125×5 =12%

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15 16097
Q:

A person takes a loan of Rs. 200 at 5% simple interest. He returns Rs.100 at the end of one year. In order clear his dues at the end of 2 years, he would pay : 

A) Rs. 100 B) Rs. 105
C) Rs. 115 D) Rs. 110
 
Answer & Explanation Answer: C) Rs. 115

Explanation:

Amount to be paid = Rs.100+200×5×1100+100×5×1100= Rs. 115.

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30 16035
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
 
Answer & Explanation Answer: 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

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14 15275
Q:

A sum of money invested for a certain number of years at 8% p.a. simple interest grows to Rs.180. The same sum of money invested for the same number of years at 4% p.a. simple interest grows to Rs.120 only. For how many years was the sum invested?

A) 25years B) 15years
C) 20years D) 22years
 
Answer & Explanation Answer: A) 25years

Explanation:

From the information provided we know that,

Principal + 8% p.a. interest on principal for n years = 180 …….. (1)

Principal + 4% p.a. interest on principal for n years = 120 ……… (2)

Subtracting equation (2) from equation (1), we get

4% p.a. interest on principal for n years = Rs.60.

Now, we can substitute this value in equation (2),

i.e Principal + 60 = 120

= Principal = Rs.60.

We know that SI = , where p is the principal, n the number of years and r the rate percent of  interest.

In equation (2), p = Rs.60, r = 4% p.a. and the simple interest = Rs.60.

Therefore, 60 =(60*n*4)/100

=> n = 100/4 = 25 years.

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13 14784