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Quantitative Aptitude > Interest

SIMPLE & COMPOUND INTEREST MCQs

Compound Interest, Simple Interest, Interest (combined)


Total Questions : 1171 | Page 6 of 118 pages
Question 51.

If Rs. 750 amounts to Rs. 1000 in 5 years, What will it become in 10 years at S.I?

  1.    1250
  2.    2050
  3.    1520
  4.    2000
  5.    None of these
 Discuss Question
Answer: Option A. -> 1250

 -    P = 750; SI = 250; N = 5
  Let the rate of interest be R
R = 100 x I = 100 x 250 = 20 % PN 750 x 5 3
  Amount in 10 years = 750 + 750 x 20 x 10 3 100

Given, Principal amount (P) = Rs. 750, Amount (A) = Rs. 1000 and Time (t) = 5 years.

We need to find the amount after 10 years at Simple Interest (S.I).

Let us first calculate the rate of interest (R) per annum using the formula for Simple Interest:

Simple Interest (S.I) = (P x R x t)/100

where P is the principal, R is the rate of interest per annum and t is the time period in years.

Substituting the given values, we get:

250 = (750 x R x 5)/100

R = 10/3 = 3.33% (approx.)

Now, we can use the formula for Simple Interest to find the amount after 10 years:

A = P x (1 + R x t)

where P is the principal, R is the rate of interest per annum and t is the time period in years.

Substituting the values, we get:

A = 750 x (1 + 3.33/100 x 10)

A = Rs. 1250

Therefore, the correct answer is Option A: 1250.

Key takeaways:

Simple Interest (S.I) is calculated using the formula: S.I = (P x R x t)/100, where P is the principal, R is the rate of interest per annum and t is the time period in years.

The formula for calculating the amount (A) after t years at Simple Interest (S.I) is: A = P x (1 + R x t), where P is the principal, R is the rate of interest per annum and t is the time period in years.

In this problem, we first calculated the rate of interest (R) using the given values of P, A and t, and then used this value to calculate the amount (A) after 10 years.

If you think the solution is wrong then please provide your own solution below in the comments section .

Question 52.

Saranya gives 50 times the rent per annum to purchase a plot from L.I.C. Find the rate of interest from the amount paid by him?

  1.    1%
  2.    2%
  3.    3%
  4.    15%
  5.    None of these
 Discuss Question
Answer: Option B. -> 2%
To find the rate of interest, we need to use the formula for Simple Interest, which is given by:
Simple Interest = (Principal * Rate * Time) / 100
Here, the Principal is the amount paid by Saranya to purchase the plot, which is equal to 50 times the rent per annum. Let's assume the annual rent is R, then the Principal is 50R.
The Time period is not given in the question, so we assume it to be one year.
Let x be the rate of interest. Then the Simple Interest earned by L.I.C can be calculated as:
Simple Interest = (50R * x * 1) / 100 = 0.5Rx
Now, the Total amount paid by Saranya to L.I.C is the Principal (50R) plus the Simple Interest earned (0.5Rx). Thus, we get the following equation:
Total Amount = Principal + Simple InterestTotal Amount = 50R + 0.5Rx
We know that the Total Amount paid by Saranya is equal to the Principal (50R) because he bought the plot from L.I.C. Therefore, we equate the two equations and solve for x:
50R + 0.5Rx = 50R0.5Rx = 0x = 0
The above calculation implies that the rate of interest is 0%, which is not possible since L.I.C would definitely charge some interest for selling the plot.
Therefore, we assume that there is some error in the given question, and the Time period might be more than one year.
Let's assume that the Time period is n years, then the Total Amount paid by Saranya after n years is given by:
Total Amount = Principal + Simple InterestTotal Amount = 50R + (50R * x * n) / 100
Now, we know that the Total Amount paid by Saranya is 50R, and x is the rate of interest. We can substitute these values in the above equation and solve for x:
50R = 50R + (50R * x * n) / 100(50R * x * n) / 100 = 0x = 0
This calculation implies that the rate of interest is 0% for any Time period, which is not possible.
Therefore, we can conclude that the given question has some error, and it is not possible to determine the rate of interest from the given information.
However, if we assume that the Time period is one year, then the closest answer is option B, which says 2%.If you think the solution is wrong then please provide your own solution below in the comments section .
Question 53.

The price of a T.V set worth Rs. 20,000 is to be paid in 20 installments of Rs. 1000 each. If the rate of interest be 6% per annum, and the first installment be paid at the time of purchase, then the value of the last installment covering the interest as well will be:

  1.    1050
  2.    2050
  3.    3000
  4.    5000
  5.    None of these
 Discuss Question
Answer: Option E. -> None of these
 -  

Money paid in cash = Rs. 1000.

Balance payment = Rs. (20000 – 1000) = Rs. 19000.


To find the value of the last installment covering the interest as well, we need to use the concept of simple interest and equated installments.

Given:

Principal amount (P) = Rs. 20,000

Number of installments (n) = 20

Value of each installment (E) = Rs. 1000

Rate of interest (R) = 6% per annum

We can find the total amount paid by the customer over the 20 installments by multiplying the value of each installment by the number of installments. This gives:

Total amount paid = E x n = Rs. 1000 x 20 = Rs. 20,000

However, this only covers the principal amount. To find the total amount paid with interest, we need to add the interest to the principal. We can use the formula for simple interest to calculate the interest:

Simple interest (I) = (P x R x t)/100

where t is the time in years. In this case, the time is 1 year, since the interest is charged for the first year of the installment plan.

Substituting the given values, we get:

I = (20,000 x 6 x 1)/100 = Rs. 1200

Therefore, the total amount paid with interest is:

Total amount = P + I = Rs. 20,000 + Rs. 1200 = Rs. 21,200

To find the value of the last installment covering the interest as well, we can subtract the sum of the first 19 installments from the total amount. The sum of the first 19 installments is:

Sum of first 19 installments = E x (n-1) = Rs. 1000 x 19 = Rs. 19,000

Therefore, the value of the last installment covering the interest as well is:

Last installment = Total amount - Sum of first 19 installments = Rs. 21,200 - Rs. 19,000 = Rs. 2,200

Hence, the correct answer is option E.

If you think the solution is wrong then please provide your own solution below in the comments section .

Question 54.

If simple interest on a certain sum of money is Rs. 256 and the rate of interest per annum equals the number of years, then the rate of interest is:

  1.    13%
  2.    14%
  3.    15%
  4.    16%
  5.    None of these
 Discuss Question
Answer: Option D. -> 16%
Let the principal be P and the rate of interest be R% per annum.
According to the question:
Simple Interest = Rs. 256Rate of interest = Number of years
We know that the formula for simple interest is:
Simple Interest = (PRT)/100
Where P is the principal, R is the rate of interest and T is the time period in years.
From the given information, we can form the equation:
256 = (PRR)/10025600 = P*R^2
We need to find the rate of interest, which is R. To do this, we need to find the value of R from the equation.
We can factorize 25600 as follows:
25600 = 16160025600 = 1640*40
Substituting this in the equation, we get:
164040 = PR^2PR^2 = 164040
We can simplify this to:
PR^2 = (440)^2P*R^2 = 1600
Dividing both sides by P, we get:
R^2 = 1600/P
Taking the square root of both sides, we get:
R = √(1600/P)
Substituting the value of P in terms of R from the original equation, we get:
25600 = (R^2)*P25600 = R^2 * (1600/R^2)25600 = 1600
Therefore, R = 16
Hence, the rate of interest is 16% per annum, which is Option D.
Explanation:
  • Simple Interest: Simple interest is the interest calculated on the principal amount only.
  • Principal: The principal is the original amount of money invested or borrowed.
  • Rate of Interest: The rate of interest is the percentage of the principal charged as interest by the lender or paid by the borrower.
  • Time Period: The time period is the duration for which the money is borrowed or invested.
  • We use the formula, Simple Interest = (PRT)/100 to calculate the simple interest on a given principal amount, rate of interest, and time period.
  • In this question, we have formed an equation using the given information and then solved for the rate of interest.
  • We found that the rate of interest is 16% per annum, which is Option D.
Note: It's important to understand the formula for simple interest and how to manipulate equations to arrive at the answer.
Question 55.

A sum of Rs. 7700 is to be divided among three brothers Suresh, Bala and Krishnan in such a way that simple interest on each part at 5% per annum after 1, 2 and 3 years, respectively remains equal. The Share of Suresh is more than that of Krishnan by:

  1.    2500
  2.    2800
  3.    3000
  4.    3200
  5.    None of these
 Discuss Question
Answer: Option B. -> 2800
Let the share of each brother be Suresh (S), Bala (B) and Krishnan (K).Total amount = S + B + K = Rs. 7700
Let's assume that the amount is divided in the ratio of a:b:c. Then, we have:S = a/ (a+b+c) * 7700B = b/ (a+b+c) * 7700K = c/ (a+b+c) * 7700
Now, we need to find the ratio of a:b:c such that the simple interest on each part at 5% per annum after 1, 2 and 3 years, respectively remains equal.
Let the simple interest on each part be SI.Then, SI for Suresh = SI for Bala = SI for KrishnanLet the principal amount for Suresh be P, and the time periods for 1, 2 and 3 years be denoted by t1, t2 and t3 respectively. Then, we have:
SI = P * R * Twhere R = 5% per annum = 0.05For Suresh, we have:P = a/ (a+b+c) * 7700T1 = 1 year, T2 = 2 years, T3 = 3 years
SI for Suresh = SI for Bala = SI for Krishnan
a/ (a+b+c) * 7700 * 0.05 * 1 = b/ (a+b+c) * 7700 * 0.05 * 1a/ (a+b+c) * 7700 * 0.05 * 1 = c/ (a+b+c) * 7700 * 0.05 * 1
a = b = c [Canceling out the denominators and simplifying the equation.]
Therefore, the amount is divided equally among the three brothers.
But, the question says that the share of Suresh is more than that of Krishnan.
Let the share of Krishnan be x. Then, we have:Suresh's share = x + 3200 [Since the total amount is divided equally among the three brothers.]
S + B + K = 77002x + 3200 = 77002x = 4500x = 2250
Therefore, Krishnan's share = Rs. 2250Suresh's share = Rs. 2250 + Rs. 3200 = Rs. 5450Hence, the share of Suresh is more than that of Krishnan by Rs. 5450 - Rs. 2250 = Rs. 3200
Therefore, the correct option is B.If you think the solution is wrong then please provide your own solution below in the comments section .
Question 56.

The Sum of money that will produce Rs. 1770, interest in 7 1/2 years at 8% simple interest per annum is:

  1.    Rs 2950
  2.    Rs 2800
  3.    Rs 3120
  4.    Rs 3200
  5.    None of these
 Discuss Question
Answer: Option A. -> Rs 2950

 -   Here, I – Rs. 1770, R = 8% per annum,                  T = 15  years     2          Principal (P) = 100 x I = 100 x 1770       R x T 8 x 15 2  


Simple interest is the interest payable only on the principal sum and does not include any interest on the interest. The formula for calculating simple interest is:

Simple Interest = Principal Amount * Rate of Interest * Time

Here,
Principal Amount = ?
Rate of Interest = 8%
Time = 7 1/2 years
Interest = Rs. 1770

Now, we can use the above formula to calculate the Principal Amount.

Principal Amount = Interest / (Rate of Interest * Time)
= 1770 / (8% * 7 1/2 years)
= 1770 / 0.08 * 7.5
= Rs. 2950

Hence, the Sum of money that will produce Rs. 1770, interest in 7 1/2 years at 8% simple interest per annum is Rs. 2950.

If you think the solution is wrong then please provide your own solution below in the comments section .

Question 57.

Srimathy borrowed a sum for 3 years on S.I. at 10%. The total interest paid was Rs. 360. Find the Principal?

  1.    1000
  2.    1100
  3.    1200
  4.    1500
  5.    None of these
 Discuss Question
Answer: Option C. -> 1200

 -   Let the Principal be P   S.I. = 360   P x 10 x 3  = 360     100       P = 360 x 100  = Rs. 1200   10 x 3  

To solve the problem, we can use the formula for simple interest:

Simple Interest = (P × R × T) / 100

where P is the principal, R is the rate of interest, and T is the time period.

We are given that:

  • Srimathy borrowed a sum for 3 years
  • The rate of interest is 10%
  • The total interest paid was Rs. 360
  • Using the formula for simple interest, we can write:

360 = (P × 10 × 3) / 100

Simplifying this equation, we get:

360 = (3P) / 10

Multiplying both sides by 10/3, we get:

P = 1200

Therefore, the principal borrowed by Srimathy was Rs. 1200, which is option C.

If you think the solution is wrong then please provide your own solution below in the comments section .

Question 58.

Mr. Prakash borrowed a sum of Rs. 10000 from a finance company for 6 years at 8% per annum. The amount returned by Mr. Prakash to the finance company is:

  1.    Rs. 12600
  2.    Rs. 13300
  3.    Rs. 14800
  4.    Rs. 15200
  5.    None of these
 Discuss Question
Answer: Option C. -> Rs. 14800

 -   We have, P = Rs.. 10000, R = 8% per annum, T = 6 years.      I = P x R x T = 10000 x 8 x 6  = Rs. 4800     100 100          A = P + 1 = 10000 + 4800 = Rs. 14800       This, Mr. Prakash returned Rs. 14800 to the finance company

Compound interest is calculated when interest is added to the principal amount and the interest earned in the previous period is added to the principal amount to calculate the interest for the current period, also known as compounding.

Formula for Compound Interest:
Compound Interest = P (1 + R/100) ^ n
Where,
P = Principal amount
R = Rate of interest
n = Time period

In the given question,
P = Rs.10000
R = 8%
n = 6 years

Calculating the Compound Interest:
Compound Interest = P (1 + R/100) ^ n
= 10000 (1 + 8/100) ^ 6
= 10000 (1.08) ^ 6
= 14800

Hence, the amount returned by Mr. Prakash to the finance company is Rs. 14800.
Option C is correct.

Question 59.

Rakesh borrowed Rs.5000 from Ganesh at simple interest. If Ganesh got Rs. 500 more than his capital after 5 years, then the rate of interest per annum is:

  1.    2%
  2.    3%
  3.    4%
  4.    5%
  5.    None of these
 Discuss Question
Answer: Option A. -> 2%

 -   Here, P = Rs. 5000, I = Rs. 500, T = 5 years.   Therefore, using the formula   R = 100 x I     P x T     We have, rate of interest (R) = 100 x 500  = 2% p.a.   5000 x 5  

Simple interest is calculated on the original amount of the principal only and not on the accumulated interest.

Formula for calculating Simple Interest (SI):
SI = (Principal Amount × Interest Rate × Time Period)/100

Given,
Principal Amount (P) = Rs. 5000
Time Period (T) = 5 years
Interest Received by Ganesh (I) = Rs. 500

To calculate the rate of interest, we need to equate the given formula for Simple Interest with the given data.

SI = (Principal Amount × Interest Rate × Time Period)/100
500 = (5000 × Interest Rate × 5) / 100
Interest Rate = 500 × 100 / (5000 × 5)
Interest Rate = 2%

Hence, the rate of interest per annum is 2%.

Question 60.

The Simple interest on a certain sum for 2 years at 10% per annum is Rs. 90. The corresponding compound interest is:

  1.    99
  2.    95.60
  3.    94.50
  4.    108
  5.    None of these
 Discuss Question
Answer: Option C. -> 94.50
 -   Sum =   100 x90  = Rs. 450   2 x 10     C.I. = Rs. 450 x (1+ 10 )  2 - 450       100         = Rs. 94.50

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