1. A person borrows Rs.5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 6 1⁄4% p.a for 2 years. Find his gain in the transaction per year.

1. Rs. 167.50

2. Rs. 150

3. Rs.225

4. Rs. 112.50

Answer & Explanation

Answer:- 4

Explanation :-

He borrows Rs. 5000 for 2 years at 4% p.a. S.I.

SI that he has to pay = (P*T*R/100) = 5000 x 4 x 2/100 = 400

He lends it at 6 1⁄4% p.a for 2 years

S.I. that he gets = (5000*(25/4)*2)/100 = 625

His overall profit in 2 years = Rs.625 – Rs.400 = Rs.225

His overall profit in 1 year = 225/2 = Rs.112.5

2. What will be the ratio of simple interest earned by certain amount at the same rate of interest for 5 years and that for 15 years?

1. 3 : 2

2. 1 : 3

3. 2 : 3

4. 3 : 1

Answer & Explanation

Answer:- 2

Explanation :-

Let Principal be P

Rate of Interest = R%

SI (for 5 years) = (P*R*5)/100=5PR/100

SI (for15 years) = (P*R*15)/100=15PR/100

Ratio=(5PR)/100)/(15PR/100)=1:3

3. A sum of money amounts to Rs.9800 after 5 years and Rs.12005 after 8 years at the same rate of simple interest. The rate of interest per annum is

1. 15%

2. 12%

3. 8%

4. 5%

Answer & Explanation

Answer:- 2

Explanation :-

SI (for 3 years) = 12005 – 9800) = Rs.2205

SI (for 5 years) =(2205/3*5)= Rs. 3675

P=9800-3675= Rs. 6125

SI=(P*R*T)/100

3675=(6125*R*5)/100

R=(3675*100)/(5*6125)

R=12%

4. A certain amount earns simple interest of Rs. 1200 after 10 years. Had the interest been 2% more, how much more interest would it have earned?

1. Rs. 25

2. None of these

3. Rs. 120

4. Cannot be determined

Answer & Explanation

Answer:- 4

Explanation :-

Because principal And Rate of Interest is not given in the statement .Therefore More SI can not be calculated

5. A man took loan from a bank at the rate of 8% p.a. simple interest. After 4 years he had to pay Rs. 6200 interest only for the period. The principal amount borrowed by him was:

1. Rs.17322

2. Rs.20245

3. Rs.18230

4. Rs.19375

Answer & Explanation

Answer:- 4

Explanation :-

T = 4 years

SI = Rs.6200

R = 8%

P=(SI*100)/(R*T)

P=(6200*100)/(8*4)

P= Rs.19375