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.
Psit Kanpur said:
5 years ago
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 // How 105?
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%.
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 // How 105?
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%.
RAVI DAS said:
8 years ago
Let the sum be Rs. 100. Then,
S.I. for first half year = Rs. (100 x 10 x 1)/(100x2) = Rs. 5.
S.I. for last half year = Rs. (105 x 10 x 1)/(100x2) = 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%.
S.I. for first half year = Rs. (100 x 10 x 1)/(100x2) = Rs. 5.
S.I. for last half year = Rs. (105 x 10 x 1)/(100x2) = 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%.
Melkam getaneh said:
3 years ago
SI = PRT/100.
Let p = 200.
SI=200*10*1/2 divided by 100=10 for six month,
SI=210*10*1/2 divided by 100=10.5 for second six months,
SI for one year = 220.5 - 200 = 20.5.
Now, I=PRR/100.
20.5 = 200 * R * 1/100,
20.5 * 100 = 200R,
2050 = 200R,
R = 2050/200,
R = 10.25.
Let p = 200.
SI=200*10*1/2 divided by 100=10 for six month,
SI=210*10*1/2 divided by 100=10.5 for second six months,
SI for one year = 220.5 - 200 = 20.5.
Now, I=PRR/100.
20.5 = 200 * R * 1/100,
20.5 * 100 = 200R,
2050 = 200R,
R = 2050/200,
R = 10.25.
(47)
Sachin said:
4 years ago
@All.
Here is the clarification.
(i) When "T" i.e., the time is given in months then it should be divided by 12 to convert into years.
(ii) When "T" i.e., the time is given in days then it should be divided by 365 to convert into years.
Here is the clarification.
(i) When "T" i.e., the time is given in months then it should be divided by 12 to convert into years.
(ii) When "T" i.e., the time is given in days then it should be divided by 365 to convert into years.
(4)
Akash S G said:
2 years ago
Why is it getting compounded even though its simple interest? Shouldn't it be;
100 * 2 * 10 / 200 also by the given logic of the question for 10 years, how will you calculate it will you keep compounding?
Anyone, explain it clearly.
100 * 2 * 10 / 200 also by the given logic of the question for 10 years, how will you calculate it will you keep compounding?
Anyone, explain it clearly.
(23)
RebelZzz said:
1 decade ago
Anybody please clarify me it. Am not able to understand.
In the question it is mentioned that amount is calculated on simple interest. Then why did the take 105. It 105 take, then it should be CI. Help me please.
In the question it is mentioned that amount is calculated on simple interest. Then why did the take 105. It 105 take, then it should be CI. Help me please.
Akash said:
7 years ago
Please tell me, why calculating compound interest for the second half, (since compound interest is interest on interest).
I think the formula should be pr (2T)/100 because we take interest twice a year.
I think the formula should be pr (2T)/100 because we take interest twice a year.
Jatin Lalwani said:
9 years ago
No, its wrong.
For first six months, they are using 100.
For next six months, they are using 100 + (interest of previous six months).
This is the concept of Compound interest, not Simple interest!
For first six months, they are using 100.
For next six months, they are using 100 + (interest of previous six months).
This is the concept of Compound interest, not Simple interest!
Kanav gupta said:
1 decade ago
@Divya Agrwal.
As you said for one year it is x. Then for 6 months it is x/2 and thus again for one year is 6 months + 6 months i.e. x/2+ x/2 = x. I know it is little bit confusing.
As you said for one year it is x. Then for 6 months it is x/2 and thus again for one year is 6 months + 6 months i.e. x/2+ x/2 = x. I know it is little bit confusing.
Prashant Singh said:
9 years ago
For those who don't understand why here 2 is multiplied as in a formula, time is mention as a year. So we are taking a month. Then we have to convert into the year by multiplying 1/2.
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