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.
Megan said:
1 decade ago
10% is already given as the interest then what do you mean by effective rate of interest?
Shweta said:
1 decade ago
I did not get, how 10.25 is consider as rate not S.I. ?
Can anybody help me and Kiran ?
Can anybody help me and Kiran ?
(1)
Rahul said:
1 decade ago
If we consider 105 as a principal for next 6 months than it is not S.I it should be C.I.
Question said:
1 decade ago
If the lender increase interest in every 24 months or 2 years then formula is would be ?
Nikita said:
9 years ago
For next 6 month why it takes as 105, in simple interest principal which is always same.
Rahul said:
8 years ago
Why we are charging interest on interest this is simple interest, not compound interest?
Jayashree said:
5 years ago
@Lakshmy answer.
Why should we divide total S.I by 100/x, can you help me out for this?
Why should we divide total S.I by 100/x, can you help me out for this?
Ammu said:
9 years ago
Here we are calculating simple interest in half yearly basis. Then how it become 10.25?
Shubham said:
5 years ago
It is simple and not compound interest, so effective interest rate should be 10% only.
Divya Agrawal said:
1 decade ago
If for one year is x. And if calculating with 6 month, for one year it should be 2x?
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