IndiaBIX

Aptitude - Simple Interest - Discussion

Discussion Forum : Simple Interest - General Questions (Q.No. 7)
Simple Interest
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:
10%
10.25%
10.5%
None of these
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.
Haritha said:   1 decade ago
Rate of interest in already given as 10%. Then what is effective rate of interest.
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.
Joy said:   2 years ago
Why are they multiplying denominators by 2? Please, anyone, help me by explaining.
(11)
Aditya said:   7 years ago
100*r*1/100=10.25 since p*r*t/100= S.I
By, solving we will get r = 10.25 answer.
Ankit saxena said:   2 decades ago
Question did not mention that the interest is to be calculated for 1 year only.
(1)
Nikita said:   4 years ago
I am not getting it.

How they are calculating 105. It should be 100, right?
(8)
Varun Mathur said:   1 decade ago
How did they got 105 and why are they multiplying it 2?

Please explain me.
Spandana said:   1 decade ago
What is effective rate of interest? diff between effective rate and rate?
Pavan said:   9 years ago
Why are we taking only p = 100?

If we take p = 10 can we get the answer?
Kalam said:   1 decade ago
Time should be mentioned here.

Or have to say that at the end of year.
Post your comments here:

Your comments will be displayed after verification.

Quick links
Quantitative Aptitude
Verbal (English)
Reasoning
Programming
Interview
Placement Papers