Simple, Compound Interest and Principal

1) Find the simple interest on Rs. 500 borrowed for 4 years at 11% per annum.
(A) 120
(B) 180
(C) 220
(D) 280

View Answer

Answer: Option C

Solution:
P = Rs. 500, t = 4 years, r = 11%
I =
Prt/100
=
500*4*11/100

= Rs. 220

2) Find the simple interest on a 90 day loan of Rs. 90,000 at 15 1/4%.
(A) Rs. 313.10
(B) Rs. 323.10
(C) Rs. 333.10
(D) Rs. 343.10

View Answer

Answer: Option D

Solution:
P = 90,000; r = 15 1/4 = 0.1525, t = 90/360
I = Prt = 90,000 * 0.1525 *
90/360
= Rs. 343.10

3) Find the amount of money gained from an investment of Rs. 800 for 3 years at 10% per annum compound interest.
(A) Rs. 1064.80
(B) Rs. 1284.80
(C) Rs. 1022.80
(D) Rs. 1562.80

View Answer

Answer: Option A

Solution:
Interest on Rs. 800 for 1 year at 10% = 0.1*800 = Rs. 80. Adding this interest to the original principal of Rs. 800
New Principal = 800 + 80 = Rs. 880
Interest on Rs. 880 for 1 year at 10% = 0.1 = Rs. 96.80
Amount accruing at the end of 3 years = Rs. 968 + Rs. 96.80
= 1064.80

4) A bank increased the rate of interest which it paid to depositors from 3.5% to 4% per annum. Find how much more interest a man would receive if he deposited Rs. 64000 in the bank for 6 moths at the new interest rate.
(A) Rs. 160
(B) Rs. 180
(C) Rs. 200
(D) Rs. 220

View Answer

Answer: Option A

Solution:
r1 = 3.5% to r2 = 4% p.a
ar = r2 - r1 = 0.5%
Amount Deposit = P = Rs. 64000
Period = 6 months = t
Interest = Prt = 64000 *
0.5/100
*
6/12
= Rs. 160

5) The difference between simple and compound interest on Rs. 1625 for 3 years at 4% per annum in rupees is?
(A) 7.95
(B) 7.90
(C) 7.70
(D) 7.75

View Answer

Answer: Option B

Solution:
P = Rs. 1625 in t = 3 years
S.I. = Prt = 1625 * 3 *
4/100
= Rs. 195
C.I = P(1 +
r/100
)t - P = 1625[(1 +
4/100
)3 - 1]
= Rs. 202.90
C.I - S.I = 202.90 - 195 = Rs. 7.90

6) The difference between simple and compound interest on a certain sum of money in two years at 15% per annum is Rs. 144. The sum in rupees is
(A) 6000
(B) 6200
(C) 6400
(D) 6300

View Answer

Answer: Option C

Solution:
|S.I - C.I| = 144 in t - 2 years
@ = 15% p.a.
S.I = Prt = P(
15/100
* 2) =
30P/100
= .30P
C.I = P(1 +
r/100
)t - P
= P [1 +
15/100
]2 - P = P(.3225)
(0.3225 - 0.30)P = 144
0.0225P = 144
=
144 * 100/225

P = Rs. 6400

7) What is the compound interest on Rs. 2500 for 3 years at 12% per annum compounded yearly? Answer nearest to rupee
(A) Rs. 1016
(B) Rs. 1014
(C) Rs. 1012
(D) Rs. 1010

View Answer

Answer: Option C

Solution:
C.I = P(1 +
r/100
)1 - P
= 2500 [(1 +
12/100
)3 - 1] = 1012

8) A man bought a car for Rs. 3,30,000. He made a first payment of Rs. 1,20,000 and borrowed the rest from a bank at 10% per annum simple interest. At the end of the first year, he repaid a certain sum to the bank after which he still owed the bank Rs. 90,000. Calculate the sum he repaid.
(A) Rs. 131,000
(B) Rs. 141,000
(C) Rs. 151,000
(D) Rs. 161,000

View Answer

Answer: Option B

Solution:
Total price of car = Rs. 330,000
First payment = 120,000
Remaining = 210,000
Interest @ 10% p.a = 21,000
Total = 231,000
Amount Payable = 90,000
Amount Repaid = 141,000
Quantitative

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