# Basic problems of interest you should look at

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 […]

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