interest Mcqs

What will be the ratio of simple interest earned by certain amount at the same rate of interest for 6 years and that for 9 years ?

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What will be the ratio of simple interest earned by certain amount at the same rate of interest for 6 years and that for 9 years ?

A. 1 : 3
B. 1 : 4
C. 2 : 3
D. Data inadequate
Let the principal be P and rate of interest be R%. So Required ratio = [(P x R x 6/100) / (13 x R x 9/100)] = 6PR/9PR = 6/9 = 2 : 3

An automobile financier claims to be lending money at simple interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes :_________?

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An automobile financier claims to be lending money at simple interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes :_________?

A. 10%
B. 10.25%
C. 10.50%
D. None of these
Let the sum be Rs. 100. Then, S.I. for first 6 months = Rs. ( 100 X 10 X 1/100 X 2 ) = Rs. 5. S.I. for last 6 months = Rs. ( 105 X 10 X 1/100 X 2 ) = Rs. 5.25. So, amount at the end of 1 year=Rs.(100 + 5 + 5.25) = Rs. 110.25 Effective rate = (110.25 – 100) = 10.25%.