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1.
What annual payment will discharge a debt of Rs. 6450 due in 4 years at 5% simple interest?
  • A.
    Rs. 1400
  • C.
    Rs. 1550
  • B.
    Rs. 1500
  • D.
    Rs. 1600
  • Answer & Explanation
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Answer : [B]
Explanation :
 
Let the annual instalment be Rs. x. Then,
 
x +  
x x 3 x 5
100
    + x +  
x x 2 x 5
100
    + x +  
x x 1 x 5
100
     + x = 6450    
 
 
  23x + 22x + 21x  + x = 6450  
20 20 20  
 
   86x = 6450 x 20  
 
   x = 1500.  
 
 
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2.
An automobile financier claims to be lending money at the 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%
  • C.
    10.5%
  • B.
    10.25%
  • D.
    None of these
  • Answer & Explanation
  • Report
Answer & Explanation : [B]
Explanation :
 
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%.  
 
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3.
A lends Rs. 2500 to B and a certain sum to C at the same time at 7% per annum simple interest. If after 4 years, A altogether receives Rs. 1120 as interest from B and C, then the sum lent to C is:
  • A.
    Rs. 700
  • C.
    Rs. 4000
  • B.
    Rs. 1500
  • D.
    Rs. 6500
  • Answer & Explanation
  • Report
Answer : [B]
Explanation :
 
Let the sum lent to C be Rs. x, Then, 2500 x 7 x 4 + x x 7 x 4  = 1120          
100 100          
 
 
  7 x  = (1120 - 700)  
25  
 
 
  x = 420 x 25  = 1500.  
7  
 
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4.
A sum of Rs. 10 is given as a loan to be returned in 6 monthly installments at Rs.3. What is the rate of interest?
  • A.
    640%
  • C.
    		 640 %  
    3  
  • B.
    		 640 %  
    7  
  • D.
    610%
  • Answer & Explanation
  • Report
Answer : [A]
Explanation :
 
Amount borrowed = Rs. 10;
 
Interest for 6 months = 10 x 1 x r = r      
2 100 20      
 
No. of Instalments = 6 monthly
 
Amount of Instalment = Rs.3
 
Interest by way of instalments = 3 x 6 x 5 x r = 3r    
2 x 12 100 80    
 
Amount should be equal
 
10+ r  = 18 + 3r  
r = 640  
20 20    
 
r = 640%    
 
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5.
Rs. 7500 is to be paid in 3 years at 5% C.I. in equal annual Instalments.
Find the amount of each instalment.
  • A.
    2754
  • C.
    2574
  • B.
    2457
  • D.
    4257
  • Answer & Explanation
  • Report
Answer : [A]
Explanation :
 
Let the annual instalment be "a"
 
i.e., a includes P and interest
 

We know that a = p

 1 +
I
100
n    
 
P = a        
1+
I
100
n
       
         
         
 
Total to be paid = 7500
 
a
+
a
+
a
 = 7500
   
1+
5
100
1+
5
100
2
1+
5
100
3
   
 
a   20   +   20   2 +   20   3  = 7500  
21 21 21  
 
a 20 +   1+ 20 + 400    = 7500      
21 21 441      
 
a = 7500 x 21     441          
20 441+420+400        
 
= 7500 x 21 x 441  = 2754        
20 1261        
 
  Annual Instalment = Rs. 2754  
 
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