Simple Interest

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%

Answer: E

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: D

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: B

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%

📖

A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at the rate of simple interest. What is the rate of interest?

A:

3%

B:

4%

C:

5%

D:

6%

Answer: D

S.I. = Rs. (15500 - 12500) = Rs. 3000.

Rate =		100 x 3000	%	= 6%
		12500 x 4

Video Explanation: https://youtu.be/SIcQu1HOmOk

📖

Reena took a loan of Rs. 1200 with simple interest for as many years as the rate of interest. If she paid Rs. 432 as interest at the end of the loan period, what was the rate of interest?

A:

3.6

B:

6

C:

18

D:

Cannot be determined

Answer: B

Let rate = R% and time = R years.

Then,		1200 x R x R		= 432
		100

12R² = 432

R² = 36

R = 6.

Video Explanation: https://youtu.be/TjjI4iRkzT0

📖

Questions for: Simple Interest