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 7 of 12.
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.
John said:
9 years ago
Why not the value of P be 1000?
Sanshunoisky said:
9 years ago
Hey there you all take the si as 105 for the next 6 months but note that it will not be simple interest. That will be a compound interest (ci).
Jaya said:
9 years ago
See guys the reason why they added 105 for next six months is.
Read the question carefully they mentioned as ''he INCLUDES THE INTEREST every six months for calculating the principal''. So they added the interest + principal for every 6 months.
Its a trick actually SI is not calculated but they indirectly telling its CI.
Read the question carefully they mentioned as ''he INCLUDES THE INTEREST every six months for calculating the principal''. So they added the interest + principal for every 6 months.
Its a trick actually SI is not calculated but they indirectly telling its CI.
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%.
Sandy said:
9 years ago
If I take P = 10 instead of 100, then the answer will be 1.02%?
Why the value of P be 100?
Guys try to help me, I need answer.
Why the value of P be 100?
Guys try to help me, I need answer.
Nikita said:
9 years ago
For next 6 month why it takes as 105, in simple interest principal which is always same.
Kiran said:
9 years ago
Why p = 100?
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!
Pavan said:
9 years ago
Why are we taking only p = 100?
If we take p = 10 can we get the answer?
If we take p = 10 can we get the answer?
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