Aptitude - Simple Interest - Discussion
Discussion Forum : Simple Interest - General Questions (Q.No. 7)
7.
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:
Answer: Option
Explanation:
Let the sum be Rs. 100. Then,
| S.I. for first 6 months = Rs. |  |
100 x 10 x 1 |  |
= Rs. 5 |
| 100 x 2 |
| S.I. for last 6 months = Rs. | |
105 x 10 x 1 | |
= Rs. 5.25 |
| 100 x 2 |
So, amount at the end of 1 year = Rs. (100 + 5 + 5.25) = Rs. 110.25
Effective rate = (110.25 - 100) = 10.25%
Discussion:
118 comments Page 10 of 12.
Deekshit said:
1 decade ago
Is they calculated for SI or CI?
Janani said:
1 decade ago
How we do without time friends? How you took 1 yr?
Rahul said:
1 decade ago
If we consider 105 as a principal for next 6 months than it is not S.I it should be C.I.
Spandana said:
1 decade ago
What is effective rate of interest? diff between effective rate and rate?
Shilpa said:
1 decade ago
What is effective rate of interest?
Raja ab said:
1 decade ago
10 % per year = 10 on 100.
So first we calculate for 6 months so 10/2 = 5 which is S.I 1 .
So 5 is add to supposed amount because in Q mention that, So principal amount 105, so next 6 month we take int 10% on 105. So S.I 2 = 5.25.
Add both int values 5+5.25 = 10.25 I think that is simple.
So first we calculate for 6 months so 10/2 = 5 which is S.I 1 .
So 5 is add to supposed amount because in Q mention that, So principal amount 105, so next 6 month we take int 10% on 105. So S.I 2 = 5.25.
Add both int values 5+5.25 = 10.25 I think that is simple.
Sravani said:
1 decade ago
Can any one explain in easy way ?
Megan said:
1 decade ago
10% is already given as the interest then what do you mean by effective rate of interest?
Ravi said:
1 decade ago
In problem he mention that after 6 months the interest is added to sum to calculate principal. So answer is 10.25.
Vignesh said:
1 decade ago
It is said as SI. So even for the second half of the year the principal should be taken as 100. Here it is taken as 105 which is in case of CI.
My answer:
For first 6 months :
ASSUME p = 100 AND r = 10%.
SO INTEREST IS 10 RS AND AMOUNT = 110.
FOR NEXT 6 MONTHS :
SAME P = 100 AND R = 10% AND WE WILL GET THE SAME INTEREST WHICH IS 10.
NET INTEREST = 20.
Net amount = 120.
So answer should be 20%. option D.
Answer will be 10.25 if its CI.
Kindly correct me if I am wrong.
My answer:
For first 6 months :
ASSUME p = 100 AND r = 10%.
SO INTEREST IS 10 RS AND AMOUNT = 110.
FOR NEXT 6 MONTHS :
SAME P = 100 AND R = 10% AND WE WILL GET THE SAME INTEREST WHICH IS 10.
NET INTEREST = 20.
Net amount = 120.
So answer should be 20%. option D.
Answer will be 10.25 if its CI.
Kindly correct me if I am wrong.
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