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 Simple Interest Questions

Popular Latest Rated Important Formulae

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:

A sum was invested for 3 years at simple interest at a certain rate. Had it been invested at 4% higher rate of interest, it would have fetched Rs 600 more. The sum is

A) Rs 4000 B) Rs 4950
C) Rs 5000 D) Rs 5150
 
Answer & Explanation Answer: C) Rs 5000

Explanation:

Let the rate of interest be R

(Interest at rate (R+4)%)–(Interest at R%)

= 600(PT(R+4)/100) –(PTR/100)

= 6003PR +12P –3PR = 60000

12P = 60000

P = 5000

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Q:

A simple interest earned on certain amount is triple the money when invested for 16 years.what is the interest rate offered ?

A) 13.33 % B) 14.25 %
C) 16.98 % D) 18.75 %
 
Answer & Explanation Answer: D) 18.75 %

Explanation:

Given,
S.I = 3 Principal Amount
=> 3A = A x 16 x R/100
By solving, we get
=> R = 18.75%

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Q:

A certain amount earns simple interest of Rs. 2260 after 3 years. Had the interest been 1 % more how much more interest would it have earned ?

A) Rs. 175 B) Rs. 220.75
C) Rs. 126 D) Can't be determined
 
Answer & Explanation Answer: D) Can't be determined

Explanation:

Here given Interest earned = Rs. 2260

Time = 3 years

Rate of interest = ?

Principal Amount = ?

So, it can't be determined.

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Q:

Gopal borrowed some money at 12% simple interest. If he had to pay back Rs. 1280 after 5 years, in order to clear off the loan. How much did he borrow?

A) Rs. 800 B) Rs. 620
C) Rs. 560 D) Rs. 480
 
Answer & Explanation Answer: A) Rs. 800

Explanation:

Let the principle amount be Rs. P

Interest rate = 12%

Total amount he paid after 5 years = Rs. 1280

ATQ, 

P + I = PTR100 + P1280 = PTR100 + 11280 = P5 x 12100 + 116P10 = 1280P = 80 x 10 = 800

 

Hence, the amount he borrowed = P = Rs. 800.

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Q:

At the beginning of March, Ryan had $621 in his savings bank account. On 10 March he deposited $60. If the bank pays 8% p.a. interest paid monthly and calculated on the minimum monthly balance, calculate the interest Ryan earns in March.

A) 2.14 B) 3.14
C) 5.14 D) 4.14
 
Answer & Explanation Answer: D) 4.14

Explanation:

I = (P x T x R) /100

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Q:

A sum of money at simple interest amounts to Rs. 415 in 2 years and to Rs. 514 in 4 years. The sum is ?

A) Rs. 316 B) Rs. 251
C) Rs. 154 D) Rs. 294
 
Answer & Explanation Answer: A) Rs. 316

Explanation:

S.I. for 2 years = (514 - 415) = Rs. 99
S.I. for 1 year = 99/2

Principal = (415 - 99) = Rs. 316.

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Q:

How long will it take $3000 to earn $60 interest at 6%?

A) 2months B) 3months
C) 4months D) 5months
 
Answer & Explanation Answer: C) 4months

Explanation:

t=I/pr

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Q:

A sapphire ring with a marked price of $1800 is offered to the purchaser on the following terms: $200 deposit and the balance to be paid over 24 equal monthly instalments with interest charged at 11.5% p.a. flat rate. Find the monthly repayments

A) $53 B) $42
C) $62 D) $82
 
Answer & Explanation Answer: D) $82

Explanation:

Total repayment amount = $1600 + $368
= $1968
= $82

regular payment= total amount/number of repayments

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