2
Q:

# A merchant receives an invoice for a motor boat for $20 000 with terms 4/30, n/100. What is the highest simple interest rate at which he can afford to borrow money in order to take advantage of the discount?  A) 247.67 B) 237.67 C) 227.67 D) 215.67 Answer: A) 247.67 Explanation: Suppose the merchant will take advantage of the cash discount of 4% of$20 000 = $800 by paying the bill within 30 days from the date of invoice. He needs to borrow$20 000 = $800 =$19 200. He would borrow this money on day 30 and repay it on day 100 (the day the original invoice is due) resulting in a 70-day loan. The interest he should be willing to pay on borrowed money should not exceed the cash discount $800. r=I/pt=21.73% The highest simple interest rate at which the merchant can afford to borrow money is 21.73%. This is a break-even rate. If he can borrow money, say at a rate of 15%, he should do so. He would borrow$19 200 for 70 days at 15%. Maturity value of the loan is $19 200(1+0.15(70/365))=$19 752.33

savings would be $20 000 −$19 752.33 = \$247.67

Q:

The rate of simple interest on a sum of money is 5% p.a. for the first 4 years, 8% p.a. for the next 3 years and 10% p.a. for the period beyond 7 years. If the simple interest accrued by the sum over a period of 10 years is ₹1,850, then the sum is:

 A) ₹2,750 B) ₹1,650 C) ₹2,500 D) ₹1,500

Explanation:

2 248
Q:

$45-15$

 A) 25 B) C) D)

Explanation:

0 150
Q:

When two equal amounts are deposited for 5 years and 3 years at the rate of 7% and 9% per annum respectively, and the difference of their simple interest is Rs 475. Then find the deposited amount.

 A) Rs. 5,937.5 B) Rs. 5,992.5 C) Rs. 5,837.5 D) Rs. 6,037.5

Explanation:

0 193
Q:

A certain sum of money becomes double of itself in 5 years at a rate of simple interest. In how many years will it become 16 times of itself at the same rate of simple interest?

 A) 20 B) 60 C) 75 D) No option is correct

Explanation:

1 172
Q:

The simple interest on a sum of money for 3 years at an interest rate of 6% p.a. is Rs.6,750. What will be the compound interest rounded off on the same sum at the same rate for the same period, compounded annually is closest to :

 A) Rs. 7,133 B) Rs. 7,163 C) Rs. 7,103 D) Rs. 7,663

Explanation:

1 168
Q:

The simple interest on a sum of money is 9/49 of the principal. The number of years are equal to the rate of interest per annum. What is the rate (in percentage) of interest
per annum?

 A) 36/7 B) 27/7 C) 15/7 D) 30/7

Explanation:

0 184
Q:

Consider the following question and decide which of the statements is sufficient to answer the question.

The simple interest on a sum of money is Rs. 100. What is the sum?

Statements:

I. The interest rate is 20% per annum.

II. The sum earned simple interest in 5 years.

 A) Both statements I and II are sufficient B) Only statement I is sufficient C) Only statement II is sufficient D) Either statement I or II is sufficient

Answer & Explanation Answer: A) Both statements I and II are sufficient

Explanation:

1 218
Q:

At 8% simple interest per annum a sum of money becomes Rs.608 in 3.5 years. What was the sum invested?

 A) Rs.440 B) Rs.475 C) Rs.450 D) Rs.460