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 Simple Interest Questions

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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:

Find: S.l. on Rs 3000 at 18% per annum for the period from 4th

A) 118 B) 105
C) 108 D) 110
 
Answer & Explanation Answer: C) 108

Explanation:

(24 + 31 + 18) days = 73 days = 1/5 year .

 

P = Rs 3000 and R = 18 % p.a.

 S.I=3000*18*15100

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Q:

What is the sum which earned interest?
I. The total simple interest was Rs. 7000 after 7 years.
II. The total of sum and simple interest was double of the sum after 5 years.

A) I alone sufficient while II alone not sufficient to answer B) II alone sufficient while I alone not sufficient to answer
C) Either I or II alone sufficient to answer D) Both I and II are necessary to answer
 
Answer & Explanation Answer: D) Both I and II are necessary to answer

Explanation:

Let the sum be Rs. x.

I  gives, S.I. = Rs. 7000 and T = 7 years.

II gives, Sum + S.I. for 5 years = 2 x Sum Sum = S.I. for 5 years.

Now, S.I. for 7 years = Rs. 7000.

therefore, S.I. for 1 year =  Rs. 1000.

Thus, I and II both are needed to get the answer.

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Q:

A loan shark made a loan of $100 to be repaid with $120 at the end of one month. What was the annual interest rate?

A) 210% B) 220%
C) 230% D) 240%
 
Answer & Explanation Answer: D) 240%

Explanation:

r=I/PT

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Q:

In how many years, Rs. 200 will produce the same interest @ 5 % as Rs. 900 produce in 2 years @ 3 ½ %  ?

A) 5.2 yrs B) 7 yrs
C) 7.9 yrs D) 6.3 yrs
 
Answer & Explanation Answer: D) 6.3 yrs

Explanation:

P = Rs. 900, R = 3 ½ % = 7/2 %, T = 2 years. 

Therefore, 

S.I. = PTR/100

S.I. = Rs. (900 x 7/2 x 2/100) = Rs. 63

Now, P = Rs. 200, S.I. = Rs. 63, R = 5 %

Time = ((100 x 63) / (200 x 5) ) years = 6.3 years.

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Q:

A certain sum is invested at simple interest at 18% p.a. for two years instead of investing at 12% p.a. for the same time period. Therefore the interest received is more by Rs. 840. Find the sum  ?

A) Rs. 5858 B) Rs. 8800
C) Rs. 7000 D) Rs. 6350
 
Answer & Explanation Answer: C) Rs. 7000

Explanation:

Let the sum be Rs. S.
(S x 18 x 2)/100 - (S x 12 x 2)/100 = 840 => 36S/100 - 24S/100 = 840

=> 12S/100 = 840 => S = 7000.

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Q:

A person lends Rs. 1540 for five years and Rs. 1800 for four years. If he gets Rs. 1788 as interest on both amounts, what is the rate of interest ?

A) 14.5% B) 11%
C) 12% D) 10.5%
 
Answer & Explanation Answer: C) 12%

Explanation:

Let the interest rate be r%

We know that,

S.I = PTR/100

=> (1540 x 5 x r)/100  +  (1800 x 4 x r)/100 = 1788

=> r = 178800/14900 = 12%

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Q:

A sum of money invested at simpleinterest triples itself in 8 years. How many times will it become in 20 years time?

A) 8 times B) 7 times
C) 6 times D) 9 times
 
Answer & Explanation Answer: C) 6 times

Explanation:

A = P(1 + rt/100)

So, A= 3P (it becomes triples)

3P = P(1 + 8r/100)→r = 25%

Now, when t = 20

⇒A = P(1 + 25*20/100)

⇒A = P(1+ 5)⇒A = 6P

So, it becomes 6 times.

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Q:

Car is purchased on hire-purchase. The cash price is $21 000 and the terms are a deposit of 10% of the price, then the balance to be paid off over 60 equal monthly instalments. Interest is charged at 12% p.a.   What is the total cost of the car?

A) 30.240 B) 31.240
C) 33.240 D) 32,240
 
Answer & Explanation Answer: D) 32,240

Explanation:

Total cost = deposit + instalment amount × number of instalments

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