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 4 of 12.
RK Hasan said:
6 years ago
it is compound interest actually,
Amount(A) = P(1+10/(2*100))^(2*1) = P(1.1025).
Interest = nr = r = A-P = 0.1025 = 10.25%.
Amount(A) = P(1+10/(2*100))^(2*1) = P(1.1025).
Interest = nr = r = A-P = 0.1025 = 10.25%.
Jhansi said:
6 years ago
@Kalpesh.
What is eff.interest?
What is eff.interest?
Kalpesh sahu said:
7 years ago
eff. interest = ( (1 + r%/(100*t) ) ^ t - 1 )* 100.
r% = rate of interest (10).
t = time divided (in this case = 2).
Soln; ( (1 + 10/(100*2) ) ^ 2 - 1 )* 100,
= ( (1 + 10/200 ) ^ 2 - 1 )* 100,
= ( (1 + 0.05 ) ^ 2 - 1 )* 100,
= ( (1.05)^2 - 1 )*100.
= ( 1.1025 - 1 )*100.
= ( 0.1025)*100,
= 10.25%.
r% = rate of interest (10).
t = time divided (in this case = 2).
Soln; ( (1 + 10/(100*2) ) ^ 2 - 1 )* 100,
= ( (1 + 10/200 ) ^ 2 - 1 )* 100,
= ( (1 + 0.05 ) ^ 2 - 1 )* 100,
= ( (1.05)^2 - 1 )*100.
= ( 1.1025 - 1 )*100.
= ( 0.1025)*100,
= 10.25%.
Bijata said:
7 years ago
The effective rate of interest = [1+I/2]^2 -1,
= [1+0.10/2]^2-1,
= [1.05]^2-1,
= 1.1025 - 1,
= 0.1025*100.
= 10.25%.
Note: ^2= it is said for only six month.
= [1+0.10/2]^2-1,
= [1.05]^2-1,
= 1.1025 - 1,
= 0.1025*100.
= 10.25%.
Note: ^2= it is said for only six month.
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.
Vikul Chauhan said:
7 years ago
The easiest way to do this question is;
Let principal =100.
A=100 [1+4/100] =112.4864.
The interest of one year 12.48.
Effective rate of interest = 12.5%.
Let principal =100.
A=100 [1+4/100] =112.4864.
The interest of one year 12.48.
Effective rate of interest = 12.5%.
Arun said:
7 years ago
Why they are assuming p as 100 why can't we take any oter values?
Aditya said:
7 years ago
100*r*1/100=10.25 since p*r*t/100= S.I
By, solving we will get r = 10.25 answer.
By, solving we will get r = 10.25 answer.
Priya said:
7 years ago
Thank you @Sushmitha.
Raghu said:
7 years ago
For six months 100*1/2=50 but they have taken 100*2 why?
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