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 6 of 12.
Shrawan singh said:
5 years ago
The principal should be 100. It's simple interest not compound interest that interest will be calculated on total amount.
RAHUL said:
9 years ago
But the answer will be different for different P.
If I take P = 200 instead of 100, then the answer will be 20.5%.
If I take P = 200 instead of 100, then the answer will be 20.5%.
Ravi said:
1 decade ago
In problem he mention that after 6 months the interest is added to sum to calculate principal. So answer is 10.25.
Sachin said:
4 years ago
@All.
Here it includes the interest every six months for calculating the principal. So they are calculating 105.
Here it includes the interest every six months for calculating the principal. So they are calculating 105.
(7)
Suraj said:
10 years ago
They take the interest of 1\2 year for six month because divided by 100*2 not 100 for simple take T = 1/2.
Ravish said:
1 decade ago
Because question suggests that "he includes the interest every six months for calculating the principal".
(1)
Sravani said:
9 years ago
If we take 105 as last 6 months principal then it is not simple interest it's like compound interest.
Yashi said:
5 years ago
@Susmita.
Why we take principal 100 for 1 year it is 105 when we calculate the rate in the last?
Why we take principal 100 for 1 year it is 105 when we calculate the rate in the last?
Shima said:
1 year ago
Effective rate = [(1+(r/n))^n] - 1.
r = 10.
n = 2 (1 interest per 6 months so 2 for 1 year).
r = 10.
n = 2 (1 interest per 6 months so 2 for 1 year).
(6)
Sonam said:
2 years ago
Here,T = 0.5 month or 1/2 month (6month)
For that, they are multiplying denominators by 2.
For that, they are multiplying denominators by 2.
(23)
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