# Basic problems of interest you should look at

Published: Published Date - 11:43 PM, Thu - 9 June 22

**Hyderabad:** This article is in continuation to the last article on preparation for the Sub-Inspector of Police recruitment exam. Here are some practice questions and answers along with explanations on the Simple Interest and Compound Interest topic.

**1. On what sum will be simple interest amount to Rs 400 after 8 months at**

5% per annum

A. 6,000 B. 12,000 C. 60,000 D. 1,200

Ans: B

Explanation:

Simple Interest = P x T x R/100

400 = p x 8/12 x 5/ 100

P =12000

**2. Rs 1,200 becomes Rs 1,380 in a span of 4 years at simple interest. What would Rs 10,000 amounts to in 4 years at twice the rate of simple interest as applicable above?**

A. 13,750 B. 12,500 C. 13,000 D. 15,000

Ans: C

Explanation:

Difference in S.I=1380-1200=180

Simple Interest = P x T x R/100

180= 1200 x 4 x R /100

R= (180×100)/4800=45/12

Then, twice the rate of simple interest as applicable above is

S.I = 10000 x 4 x 2 x 45/12/100

= 3000

Amount=P S.I= 10000 3000=13000

3. “X” and “Y” invested Rs 2000 and Rs 3000 at the simple interest rate of 5% and 4% per annum respectively in two banks. What is the difference in the simple interest earned by them after 4 years?

A. Rs 80 B. Rs 100 C. Rs 200 D. Rs 150

Ans: B

Explanation:

S.I for X= P x T x R/100 = 2000 x 5 x 1/100

S.I for Y= P x T x R/100 = 3000 x 4 x 1/100

Difference in SI for 4 years = 5× (120-100) =100

**4. The simple interest on a sum of money invested for 6 years is Rs.1500. if after 3 years, the interest rate is doubled, what will the interest be?**

A. 2250 B. 2400 C. 2540 D. 2000

Ans: A

Explanation:

S.I = P x T x R/100

Interest for 1 year =1500/6=250

If after 3 years, the interest rate is doubled then,

I=3×250 3×500

= 2250

**5. The simple interest on a certain sum of money at the rate of 10% per annum for the period of 3 years and 5 years differs by Rs 1200. What is the sum?**

A. 4000 B. 6000 C. 5400 D. 4500

Ans: B

Explanation:

S.I = P x T x R/100

Time = 5-3 = 2yrs

1200 = p x 2 x 10/100

P = 6000

**6. If a sum doubles itself in 10 years at simple interest, what must be the**

rate of interest?

A. 20% B. 15% C. 12.5% D. 10%

Ans: D

Explanation:

Assume that sum is Rs 100

It becomes 200 in 10 years

Then interest= 100

Interest for 1 year =100/10=10

Rate of interest = 10/100 x 100 = 10%

**7. A certain amount is deposited in a bank for 5 years at simple interest at the rate of 8% p.a. An equal amount is deposited at the rate of 12% p.a. simple interest for a period of 3 years. If the difference in the interests earned by the two deposits is equal to Rs100, what would be the sum of the amounts deposited in both the banks?**

A. Rs 4500 B. Rs 4000 C. Rs 5000 D. Rs 5200

Ans: C

Explanation:

The difference in S.I is =100

Since, principles are equal=P

Then,

(p× 8/100 x 5) – ( 12/100 x 3×P) =100

40P-36P=100*100

P= 2500

The sum of amounts is = 2500 2500 =5000

To be continued…

By Banda Ravipal Reddy

Director, SIGMA

Sai Institute of General Mental Ability

Hyderabad