Simple and Compound Interest ( 6 to 10 )

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Questions:

6. A sum of Rs.12000 amounts to Rs. 15000 in 5 years at the rate of simple interest. What is the rate of interest?

A)    4%

B)    5%

C)    10%

D)    2%

E)    None of these

View Answer

Answer: option (B)

Explanation:

R = (100 * S.I. / P * T)

S.I. = Rs. (15000 – 12000) = Rs. 3000

Rate = (100*3000/12000*5) = 5%

 

7. A woman took a loan from a bank at the rate of 10% p.a. simple interest. After 2 years she had to pay Rs. 3600 interest only for the period. The principal amount borrowed by her was:

A)    Rs.10000

B)    Rs.13000

C)    Rs.15000

D)    Rs.18000

E)    None of these

View Answer

Answer: option (D)

Explanation:

P= (100 * S.I. / R * T)

S.I = Rs.3600, R = 10%, T = 2

P = (100 * 3600 / 10 * 2) = Rs.18000

 

8. What if the simple interest on a sum of money at 5% per annum for 2 years is Rs.1600, find the compound interest on the same sum for the same period at the same rate.

A)    Rs.3260

B)    Rs.2000

C)    Rs.1640

D)    Rs.6432

E)    None of these

View Answer

Answer: option (C)


Explanation:

R = 5%, T = 2, S.I. = Rs.1600

P = (100 * S.I. / R * T)

P = (100 * 1600 / 5 * 2) = Rs.16000

Amount = [16000 * (1 + (5/100)2)] = Rs. (16000 * 21/20 * 21/20)

= Rs.17640

C.I. = Rs. (17640 – 16000) = Rs. 1640

 

9. What will be the compound interest on Rs.5625 for 6 months at 16% per annum compounded quarterly?

A)    Rs.459

B)    Rs.941

C)    Rs.850

D)    Rs.765

E)    None of these

View Answer

Answer: option (A)

Explanation:

Amt = P [1 + ((R / 4)/100)] 4n

P = 5625, n = 6 months = 2 quarters, R = 16% = 4% per quarter

Amount = Rs. [5625 * (1 + (4/100)2]

= Rs. (5625 * 26/25 * 26/25) = Rs.6084

C.I. = Rs. (6084 – 5625) = Rs.459

 

10. What is the present worth of Rs.132 due in 2 years at 5% simple interest per annum?

A)    Rs.120

B)    Rs.112

C)    Rs.118

D)    Rs.122

E)    None of these

View Answer

Answer: option (A)

Explanation:

Let the present worth be Rs. x.

Then, S.I. = Rs. (132 – x)

Therefore,   (x * 5 * 2 / 100) = 132 – x

10x = 13200 – 100x

110x = 13200

x = 120

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