Simple Interest - Aptitude Questions and Answers

Simple Interest Questions and Answers

Learn and practice the chapter "Simple Interest" with these solved Aptitude Questions and Answers. Each question in the topic is accompanied by a clear and easy explanation, diagrams, formulae, shortcuts and tricks that help in understanding the concept.

Use of Simple Interest Questions

The questions and examples given in this section will be useful to all the freshers, college students and engineering students preparing for placement tests or any competitive exam like MBA, CAT, MAT, SNAP, MHCET, XAT, NMAT, GATE, Bank exams - IBPS, SBI, RBI, RRB, SSB, SSC, UPSC etc.

Practice with this online test to crack your placements and entrance tests!
1. I have Rs 7500/- which I deposit in a bank at a simple quarterly interest of 8%. How much will the amount yield me in two and a half years?

a. Rs. 8600
b. Rs. 9000
c. Rs. 9050
d. Rs. 9300

Answer: b. Rs. 9000

Explanation:

Simple Interest =PRT
100
Principal = P = Rs. 7500
Rate of interest = R = 8% quarterly =R=8= 2%
44
Time period = T = 2.5 years = 4T = 10 (quarters)
Amount after 2.5 years = Principal + Simple Interest
Amount = 7500 +7500 x 10 x 2= 7500 + 1500 = Rs. 9000
100

Tip:
For half yearly interest:- R =Rand T= 2T
2
For quarterly interest:- R =Rand T= 4T
4
For monthly interest:- R =Rand T= 12T
12


2. Sujoy went to a mobile shop to buy a new mobile phone. The shop is running an offer which says, you can buy the mobile phone at 20,000 Rs cash or you can initially make a payment of Rs 4000 and pay 4 equal monthly installments. The rate of interest charged will be 8% pa. Find the value of installment to be paid each month.

a. Rs. 4000
b. Rs. 4050.33
c. Rs. 4066.01
d. Rs. 4106.67

Answer: c. Rs. 4066.01

Explanation:

Down payment = Rs. 4000
Remaining Amount = Rs. 20000 - Rs. 4000 = Rs. 16000
After 4 months total amount to be paid = 16000 + Simple Interest on 16000

Simple Interest =PRT; T = 4 months =4years
10012
∴ Total Amount = 16000 +16000 x 8 x 4= 16000 + 426.67 = Rs. 16426.67
12 x 100

Now how to calculate installments?
Total installments = 4 (One installment per month)

Simple and Easy rule -
If there are 'n' installments, then, 1st installment will have interest for (n-1) months, 2nd will have interest for (n-2) months and so on.


So in this case, n=4
∴ 1st installment will have interest for 3 months (n-1 = 4-1=3 months)
2nd installment will have interest for 2 months (n-2 = 4-2=2 months)
3rd installment will have interest for 1 month (n-3 = 4-3=1 month)
4th installment will have no interest (n-4 = 4-4=0 months)

Let each installment be of Rs. A
Total Amount = 4 Installments + Interest on those 4 Installments
∴ Total Amount = 4A +P x R x T
100
Now here, rate of interest is same for all installments = R = 8%
P = A     (same amount 'A' for all installments)
From above rule we can calculate effective time period 'T'
T (for interest calculation) = 3months + 2 months + 1 month + 0 months
∴ T = 6months =6years
12
∴ Total Amount = 4A +A x 8 x 6= 4A +4A=101A
100 x 1210025
∴ 16426.67=101A
25
∴ A = Rs. 4066.01 (Each month installment)

Tip:
Since rate of interest is same we can use above short cut.
If rate of interest or installment amount (A) or both varies then we have to calculate interest
separately for each installment by applying formula SI =PRTfor every installment.
100


3. In 30 years an amount becomes 5 times the original amount. What is the rate of interest?

a. 6.67%
b. 12.5%
c. 13.33%
d. 24%

Answer: c. 13.33%

Explanation:

Original amount = P
In T = 30 years, Amount = 5P
∴ Interest received in 30 years = 5P - P = 4P

Simple Interest =PRT
100
∴ 4P =P x R x 30
100
∴ R = 13.33%


4. When my father started working, he deposited some amount at simple interest in the bank. After 15 years the amount became 7 times. If the rate of interest remains, in how many more years will the amount become 10 times?

a. 3 years
b. 5 years
c. 7 years
d. 7.5 years

Answer: d. 7.5 years

Explanation:

Let initial amount = P
In T = 15 years, Amount becomes 7P

So, Simple Interest = 7P - P = 6P =P x R x 15---------> As, SI =PRT
100100
∴ R = 40%
In how many years will amount become 10P?
R = 40%; Amount = 10P.
So, Simple Interest = 10P - P = 9P =P x 40 x T
100
∴ T = 22.5 years (in this time, amount will be 10 times the original)


5. A certain amount becomes Rs 3000 at a simple interest of 12%. Keeping the time period same, if the rate of simple interest is increased by 3%, the amount will become 300 Rs/- more than in the previous setting. What is the amount? Also find the time period.

a. Rs. 1500 and 7 years
b. Rs. 1800 and 5.5 years
c. Rs. 1900 and 8.25 years
d. Rs. 2000 and 20 years

Answer: b. Rs. 1800 and 5.5 years

Explanation:

Let Simple Interest be S
Original sum 'P' and Time 'T' remains same
Also, 3% increase in rate of interested means, New rate = 15%
Increase of 300 Rs/- in the final amount means, New amount = Rs 3300/-
So, Amount 2 - Amount 1 = (P+S1) - (P+S2) = S1-S2
∴ 3300 - 3000 = S1-S2
∴ S1-S2 = 300

P x 15 x T-P x 12 x T= 300 --------> As, Simple Interest =PRT
100100100
3PT= 300
100
PT = 10000
For R = 15%,
Simple Interest =P x 15 x T=10000 x 15= Rs. 1500
100100
Original sum = Amount - Interest = 3300-1500 = Rs. 1800 (Principle amount)
Also, PT = 10000
∴ T =10000= 5.55 years (Time period)
1800