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 3 of 12.
Megan said:
1 decade ago
10% is already given as the interest then what do you mean by effective rate of interest?
Sravani said:
1 decade ago
Can any one explain in easy way ?
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.
Shilpa said:
1 decade ago
What is effective rate of interest?
Spandana said:
1 decade ago
What is effective rate of interest? diff between effective rate and rate?
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.
Janani said:
1 decade ago
How we do without time friends? How you took 1 yr?
Deekshit said:
1 decade ago
Is they calculated for SI or CI?
Amit said:
1 decade ago
Period has not been mentioned?
Naznin said:
1 decade ago
@Amit.
Here given that "Effective rate of interest" which is for period of 1 year..effective rate means rate for one year.
Here given that "Effective rate of interest" which is for period of 1 year..effective rate means rate for one year.
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