Simple Interest

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: A

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

Video Explanation: https://youtu.be/zBjcwqIcmL4

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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

Answer: D

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

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

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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

Answer: C

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

Required ratio =

	P x R x 6
	100

=

6PR

=

6

= 2 : 3.

	P x R x 9
	100

9PR

9

Video Explanation: https://youtu.be/GaaEDwTWc6w

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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: C

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

Video Explanation: https://youtu.be/UYwiBCRN39s

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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: C

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

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Questions for: Simple Interest