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:
10%
10.25%
10.5%
None of these
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.

Seyedali Fathima said:   8 years ago
How do consider amount p=100?

Pooja said:   7 years ago
Why the total sum is 100?

Ashwini said:   5 years ago
Please explain clearly.

Priya said:   1 decade ago
How did they got 105?

Monica said:   8 years ago
Well said @Sushmitha.

Priya said:   7 years ago
Thank you @Sushmitha.

Khushi said:   7 years ago
Thank you @Sushmita.

Kiran said:   9 years ago
Why p = 100?


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