Simple Interest - General Questions

A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6% p.a for 2 years. Find his gain in the transaction per year.

A.	Rs. 112.50
B.	Rs. 125
C.	Rs. 225
D.	Rs. 167.50

Answer: Option A

Explanation:

Gain in 2 years

= Rs.			5000 x	25	x	2		-		5000 x 4 x 2
				4		100				100

= Rs. (625 - 400)

= Rs. 225.

Gain in 1 year = Rs.		225		= Rs. 112.50
		2

A certain amount earns simple interest of Rs. 1750 after 7 years. Had the interest been 2% more, how much more interest would it have earned?

A.	Rs. 35
B.	Rs. 245
C.	Rs. 350
D.	Cannot be determined
E.	None of these

Answer: Option D

Explanation:

We need to know the S.I., principal and time to find the rate.

Since the principal is not given, so data is inadequate.

What will be the ratio of simple interest earned by certain amount at the same rate of interest for 6 years and that for 9 years?

A.	1 : 3
B.	1 : 4
C.	2 : 3
D.	Data inadequate
E.	None of these

Answer: Option C

Explanation:

Let the principal be P and rate of interest be R%.

Required ratio =

	P x R x 6
	100

6PR

= 2 : 3.

	P x R x 9
	100

9PR

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: Option C

Explanation:

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

S.I. for 5 years = Rs.		2205	x 5		= Rs. 3675
		3

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

Hence, rate =		100 x 3675	%	= 12%
		6125 x 5

A man took loan from a bank at the rate of 12% p.a. simple interest. After 3 years he had to pay Rs. 5400 interest only for the period. The principal amount borrowed by him was:

A.	Rs. 2000
B.	Rs. 10,000
C.	Rs. 15,000
D.	Rs. 20,000

Answer: Option C

Explanation:

Principal = Rs.		100 x 5400		= Rs. 15000.
		12 x 3

A sum of Rs. 725 is lent in the beginning of a year at a certain rate of interest. After 8 months, a sum of Rs. 362.50 more is lent but at the rate twice the former. At the end of the year, Rs. 33.50 is earned as interest from both the loans. What was the original rate of interest?

A.	3.6%
B.	4.5%
C.	5%
D.	6%
E.	None of these

Answer: Option E

Explanation:

Let the original rate be R%. Then, new rate = (2R)%.

Note:
Here, original rate is for 1 year(s); the new rate is for only 4 months i.e. year(s).

		725 x R x 1		+		362.50 x 2R x 1		= 33.50
		100				100 x 3

(2175 + 725) R = 33.50 x 100 x 3

(2175 + 725) R = 10050

(2900)R = 10050

R =	10050	= 3.46
	2900

Original rate = 3.46%

A lent Rs. 5000 to B for 2 years and Rs. 3000 to C for 4 years on simple interest at the same rate of interest and received Rs. 2200 in all from both of them as interest. The rate of interest per annum is:

A.	5%
B.	7%
C.	7 1/8 %
D.	10%

Answer: Option D

Explanation:

Let the rate be R% p.a.

Then,		5000 x R x 2		+		3000 x R x 4		= 2200.
		100				100

100R + 120R = 2200

R =		2200		= 10.
		220

Rate = 10%.

An automobile financier claims to be lending money at simple interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes:

A.	10%
B.	10.25%
C.	10.5%
D.	None of these

Answer: Option B

Explanation:

Let the sum be Rs. 100. Then,

S.I. for first 6 months = Rs.		100 x 10 x 1		= Rs. 5
		100 x 2

S.I. for last 6 months = Rs.		105 x 10 x 1		= Rs. 5.25
		100 x 2

So, amount at the end of 1 year = Rs. (100 + 5 + 5.25) = Rs. 110.25

Effective rate = (110.25 - 100) = 10.25%

Simple Interest - General Questions

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