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.
Divesh said:
1 decade ago
Total amount after 1 year 110.25. Principal is 100 So SI = 10.25.
SI = PxRxT/100.
10.25 = 100 x R x 1/100.
R = 10.25.
In the solution they directly its written as effective rate.
SI = PxRxT/100.
10.25 = 100 x R x 1/100.
R = 10.25.
In the solution they directly its written as effective rate.
Bhushan said:
1 decade ago
Hi, we can solve this problem by using compound interest method. Such as interest compounded half yearly.
R = 5%, P = 100.
A = p{1+R/100}^2.
A = 100{1+5/100}^2.
A = 110.25.
R = 5%, P = 100.
A = p{1+R/100}^2.
A = 100{1+5/100}^2.
A = 110.25.
Maggi said:
8 years ago
6 months is considered 1/2 (Time =1/20).
In the question the person charges for 6 months instead of 1 year.
So effective interest is asked 5% in first 6 and 5.25 in next.
In the question the person charges for 6 months instead of 1 year.
So effective interest is asked 5% in first 6 and 5.25 in next.
Sumit said:
1 decade ago
S.I is always calculate on original sum. But here the last six month S.I is calculate on Amount at the end of 1st 6 month. Is'nt this is the concept of C.I not of S.I ?
Seemanchal das said:
9 years ago
According to Answer:
Let principal is 100
So si= P * R * T/100.
Then we get 5.
Principal for next 6 month is 105.
My question is why 5 is add with principal?
Let principal is 100
So si= P * R * T/100.
Then we get 5.
Principal for next 6 month is 105.
My question is why 5 is add with principal?
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?
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%.
Jeet said:
2 years ago
The unit for rate of interest is P.C.P.A that is per-cent per annum, therefore we had calculated the effective rate of interest for 1 annum i.e. 1 year.
(2)
Nadeem said:
5 years ago
Even if we take P different, say 200, answer is the same,
SI (first 6 month ) = 10,
SI( second 6 month) = 10.5,
Then Rate = 20.5/200 * 100 = 10.25.
SI (first 6 month ) = 10,
SI( second 6 month) = 10.5,
Then Rate = 20.5/200 * 100 = 10.25.
Ramesh said:
9 years ago
Why has he taken 10% interest rate instead of taking 6 months interest rate?
Time is taken for 6 months but interest is not taken for 6 months.
Time is taken for 6 months but interest is not taken for 6 months.
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