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 8 of 12.
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.
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%.
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.
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).
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.
Anil Kumar said:
10 years ago
Let the sum be Rs. 100. Then, for six month time will be (6/12) year which become 1/2 year.
S.I. for first 6 months = Rs. (100 x 10 x 1)/100*2 = Rs. 5.
Now Principal for next 6 months will 100+5 = 105.
S.I. for next 6 months = Rs. (105 x 10 x 1)100*2 = Rs. 5.25.
Total interest in a year 10.25.
Apply formula:
S.I. = P*r*t/100.
Put value for a year now.
10.25 = 100*r*1/100.
R = 10.25*100/100*1.
R = 10.25%.
S.I. for first 6 months = Rs. (100 x 10 x 1)/100*2 = Rs. 5.
Now Principal for next 6 months will 100+5 = 105.
S.I. for next 6 months = Rs. (105 x 10 x 1)100*2 = Rs. 5.25.
Total interest in a year 10.25.
Apply formula:
S.I. = P*r*t/100.
Put value for a year now.
10.25 = 100*r*1/100.
R = 10.25*100/100*1.
R = 10.25%.
V!cky said:
1 decade ago
a+b+ab/100 net interest you get 10.25.
Si = 5% for 1 year next year will be same.
Si = 5% for 1 year next year will be same.
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.
Rose said:
1 decade ago
Please can anyone give a better explanation.
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