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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:

The difference between Simple Interest and Compound Interest at the rate of 12% on the same amount for 3 years is Rs. 112.32. What is the principal amount if interest is compounded annually?

A) Rs. 25000 B) Rs. 2500
C) Rs. 50000 D) Rs. 5000
 
Answer & Explanation Answer: B) Rs. 2500

Explanation:

Let the principal amount be Rs. x
Calculating SI:
SI for 1 year at 12% rate is Rs (12/100)*x. For 3 years it will be Rs (36/100)*x ------ (1)
Calculating CI:
For 1st year, Interest = (12/100)*x
For 2nd year, interest = (12/100)*x + (12/100)*x + (144/10000)*x
For 3rd year, interest = (12/100)*x + (12/100)*x + (12/100)*x + (144/10000)*x + (144/10000)*x + (1728/1000000)*x. ------ (2)
Subtracting equation 2 and 1 and solving further,
312*144*x/1000000 = 112.32
X = Rs 2500.
Alternative way: Using formula for Difference
between CI and SI for 3 years

we can also use the above formula to find the value of P.

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Q:

A person divided a sum of Rs. 17,200 into three parts and invested at 5%. 6% and 9% per annum simple interest. At the end of two years, he got the same interest on each part of money. What is the money invested at 9%?

 

A) Rs. 3,200 B) Rs. 4,000
C) Rs. 4,800 D) Rs. 5000
 
Answer & Explanation Answer: B) Rs. 4,000

Explanation:
Let sum invested @ 5% be P1, @ 6% be P2 then @ 9% =17200-(P1+P2)
So according to question
P1*5*2/100 = P2*6*2/100 or P1 = (6/5) P2
Also P2*6*2/100 = [17200-(P1+P2)]*9*2/100
Or 2 P2 = [17200–(11/5)P2] * 3
Or (2 + 33/5)P2 = 17200 * 3
P2 = 17200 * 3 * 5 / 43 = 6000
So P1 = 6/5 P2 = 7200
So Sum invested @ 9% = 17200–(6000+7200) = Rs 4000
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1 2253
Q:

Manu invested an amount of Rs. 14800 at the rate of 7% per annum. After how many years will she obtain a simple interest of Rs.15800?

A) 16.75 yrs B) 15.25 yrs
C) 14 yrs D) 13.5 yrs
 
Answer & Explanation Answer: B) 15.25 yrs

Explanation:

We know that,

I = PTR/100

ATQ,

15800 = 14800 x T x 6/100

T = 15800/148x7

T = 15800/1036

T = 15.25 yrs.

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10 2213
Q:

Arun took a loan of Rs. 29000 with simple interest for as many years as the rate of interest. If he paid Rs. 10440 as interest at the end of the loan period, what was the rate of interest?

A) 5.5% B) 6%
C) 6.5% D) 7%
 
Answer & Explanation Answer: B) 6%

Explanation:

Principle amount = Rs. 29000

Interest = Rs. 10440

Let rate of interest = r%

=> So, time = r years

According to the question,

10440 = 29000 x r x r/100

290 x r x r = 10440

r x r = 1044/29 = 36

r = 6

 

Hence, the rate of interest = 6% and time = 6 yrs.

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14 2129
Q:

If a person repaid Rs. 22500 after 10 years of borrowing a loan, at 10% per annum simple interest find out what amount did he take as a loan?

A) 11,225 B) 11,250
C) 10,000 D) 7,500
 
Answer & Explanation Answer: B) 11,250

Explanation:

SI = PTR/100

SI = PX100/100

SI = P

So, Amount=P+SI=2P→22500 = 2P→P = 11250

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Q:

Albert invested an amount of x rupees in a fixed deposit scheme offering 10% per annum for 1st year and 15% per annum for 2nd year and received an amount of Rs 20,240 after the two years. What is x (in Rs)?

A) 15000 B) 16000
C) 14000 D) 18000
 
Answer & Explanation Answer: B) 16000

Explanation:
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12 2043
Q:

A sum of Rs. 2600 is invested at two different rates of interest. The difference between the simple interests got after 4 years is Rs 402.80 at these two rates, what is the difference between the rates of interest?

A) 1.58 B) 2.63
C) 3.87 D) 4.02
 
Answer & Explanation Answer: C) 3.87

Explanation:

Let the two different rates of interests be r1 and r2 respectively.

From the given data,

2600 x 4 x r1 - r2100  = 402.80r1 - r2 = 402.80104  = 3.87

 

Hence, the difference in the interest rates = 3.87

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6 1966
Q:

If in 3 years at simple interest the principal increases by 15%. What will be the approximate compound interest earned (in Rs lakhs) on Rs 15 lakhs in 3 years at the same rate?

A) 7.81 B) 2.87
C) 2.36 D) 3.38
 
Answer & Explanation Answer: C) 2.36

Explanation:
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