Simple Interest

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Directions: Each of the questions given below is followed by series of options among which you have to choose the best one. You can also review your choices by clicking into answer section.


1. A person borrowed Rs.500 at the rate of 5% per annum S.1. What amount will he pay to clear the debt after 4 years?

A.Rs. 200

B.Rs. 600

C.Rs. 550

D.Rs. 700


Answer

                  Ans: Option B

       Explanation:

       500 + (500*5*4)/100 = 600


2. Ram lends a sum of money to Shyam at an interest rate of 5% p.a. After two years, he charges an interest of 8% p.a. At the end of five years, Shyam pays Rs.13400 to Ram, how much money did he initially borrow?

A. Rs.8000

B. Rs.9000

C. Rs.10000

D. Rs.10500


Answer

                  Ans: Option C

       Explanation:

       Let the sum of money be Rs.x

       Total Interest = (x*2*5/100) + (x*3*8/100) = 0.34x x+0.34x => 1.34x = 13400

        x = Rs.10000


3. A sum of Rs.10 is given as a loan to be returned in 6 monthly installments at Rs.3. What is the rate of interest?

A. 820%

B. 620%

C. 780%

D. 640%


Answer

                  Ans: Option D

       Explanation:

       No explanation


4. How many years does it take for an amount of Rs.20000 to fetch an interest of Rs.8400 at 7% interest?

A. 5 years

B. 5.5 years

C. 6 years

D. 7 years


Answer

                  Ans: Option C

       Explanation:

        I = PTR/100

        8400=20000*T*7/100

         T=6


5. How much time will it take for an amount of Rs. 900 to yield Rs. 81 as interest at 4.5% per annum of simple interest?

A. 2 years

B. 3 years

C. 1 year

D. 4 years


Answer

                  Ans: Option A

       Explanation:

        P = Rs.900

       SI = Rs.81

         T = ?

         R = 4.5%

         T= 100×SIPR=100×81900×4.5=2 years


6. A sum of money amounts to Rs.49440 in three years and Rs.50400 in five years at the same interest rate. Find the rate of interest per annum.

A. 10%

B. 9%

C. 9.6%

D. 8%


Answer

                  Ans: Option A

       Explanation:

       Interest for 2 years = 50400-49440 = Rs.960

       Interest for 3 years = 3*960/2 = Rs.1440

        Principal = 49440-1440 = Rs.48000

        1440 = 48000*3*R/100

         R=10%


7. Find the Simple Interest on Rs. 7500 at 11% for 2 Years and 5 months.

A. Rs.1994.25

B. Rs.1991.25

C. Rs.1992.75

D. Rs.1993.75


Answer

                  Ans: Option D

       Explanation:  

        Time, T = 2 year 5 months = 29 months = 29/12 year

        SI=PRT100=7500×11×(29/12)×100

         =75×11×2912

         =1993.75


8. Rs.20000 is invested at 11% compound interest for 2 years. Find the interest in the second year.

A. Rs.4642

B. Rs.2200

C. Rs.4400

D. Rs.2442


Answer

                  Ans: Option D

       Explanation:

       After 1 year,

        A = 20000[1+(11/100)] = Rs.22200

        I = Rs.2200

        After 2 years,

        A = 20000[1+(11/100)]^2 = Rs.24642

         I = Rs.4642

         Interest in the second year => 4642-2200 = Rs.2442


9. A sum fetched a total simple interest of Rs. 4016.25 at the rate of 9 p.c.p.a. in 5 years. What is the sum?

A. Rs. 4462.50

B. Rs. 8032.50

C. Rs. 8900

D. Rs. 8925


Answer

                  Ans: Option D

       Explanation:

       Principal = Rs.100 x 4016.25/(9 x 5) 

        = Rs. 401625/45

        = Rs. 8925.


10. The difference between compound interest and simple interest on a sum of Rs.10000 for 2 years at a rate of 5% interest is

A. Rs.25

B. Rs.20

C. Rs.10

D. Rs.5


Answer

                  Ans: Option A

       Explanation:

        S.I = 10000*2*5/100 => 1000

         C.I = [10000(1+(5/100))^2)] – 10000 => 1025

         C.I-S.I => Rs.25


11. If the simple interest on a certain sum of money for 4 years is one–fifth of the sum, then the rate of interest per annum is

A. 4%

B. 7%

C. 6%

D. 5%


Answer

                  Ans: Option D

       Explanation:       

        Let the Principal (P) be x

        Then, Simple Interest (SI) = x/5

         Time (T) = 4 years

          Rate of interest per annum(R) = 100×SIPT=100×x5x×4=204=5%


12. Ashok took a loan of Rs. 15000 for 3 years at simple interest. If the total interest paid is R. 2700, what is the rate of interest per annum?

A.5.4%

B.9%

C.6%

D.18%


Answer

                  Ans: Option C

       Explanation:

       (100*2700) / (15000*3) = 6


13. Simple interest on Rs.3500 for 2 years at 9% interest is equal to the compound interest on a certain sum of money for the same number of years at 10% per annum. Find the sum of money.

A. Rs.3310

B. Rs.3000

C. Rs.3500

D. Rs.6300


Answer

                  Ans: Option D

       Explanation:

       S.I = 3500*2*9/100

        => Rs.630

        C.I => P[(1+(10/100))^2] – P

        P[(1.1)^2 – 1]

        0.21P

        630 P

      Rs.3000


14. What will be the ratio of simple interest earned by certain amount at the same rate of interest for 5 years and that for 15 years?

A. 3 : 2

B. 1 : 3

C. 2 : 3

D. 3 : 1


Answer

                  Ans: Option B

       Explanation:

       Let Principal = P

       Rate of Interest = R%

       Required Ratio = (PR×5100)(PR×15100)=515=13=1:3


15. Satish took a loan at 10% p.a. S.I. After 4 years, he returned the principal along with the interest. If he returns in all Rs. 3500, what is the principal amount?

A. Rs. 3250

B.Rs. 3150

C.Rs. 2500

D. Rs. 2100


Answer

                  Ans: Option C

       Explanation:

       Let principal be x then x + (x*10*4)/100 = 3500 hence x = 2500


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