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 12 of 12.
Devi said:
1 decade ago
For half of the year we take 1/2 (for 6months) and also by adding another 1/2 for next 6 months we get the total amount for a year.
Varun said:
1 decade ago
I am not getting that why are they multiplying 2 in the first 6 and in last 6 months ? Can any one provide me with the full and correct explanation for this?
Kalam said:
1 decade ago
Time should be mentioned here.
Or have to say that at the end of year.
Or have to say that at the end of year.
Shweta said:
1 decade ago
I did not get, how 10.25 is consider as rate not S.I. ?
Can anybody help me and Kiran ?
Can anybody help me and Kiran ?
(1)
Ravish said:
1 decade ago
Because question suggests that "he includes the interest every six months for calculating the principal".
(1)
Punna said:
1 decade ago
Why we take last 6 months principal as 105?
(1)
Kiran said:
1 decade ago
Total Simple Interest is Rs.5.00+5.25 = 10.25
How can we say that it is a rate of interest whereas it is formula of calulating simple int.
How can we say that it is a rate of interest whereas it is formula of calulating simple int.
(1)
Ankit saxena said:
2 decades ago
Question did not mention that the interest is to be calculated for 1 year only.
(1)
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