This EduRev document offers 10 Multiple Choice Questions (MCQs) from the topic Simple & Compound Interest (Level - 1). These questions are of Level - 1 difficulty and will assist you in the preparation of CAT & other MBA exams. You can practice/attempt these CAT Multiple Choice Questions (MCQs) and check the explanations for a better understanding of the topic.
Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:Mr. Bajaj borrowed Rs. 25,000 from bank at the rate of 12% simple interest. He gave Rs. 10,000 to Ambani at 10% simple interest and Rs. 15,000 to Mittal at 15% simple interest. After 1 year, how much profit (in Rs.) will Bajaj get?
Explanation
Simple interest =
Profit earned by Mr. Bajaj = SI received by Mr. Bajaj from Ambani + SI received by Mr. Bajaj from Mittal - SI paid by Mr.Bajaj to the bank
= 1,000 + 2,250 - 3,000
= Rs. 250
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:Find the rate percent of the simple interest per annum if the sum borrowed becomes double in 5 years.
Explanation
Let the principal amount be 'P' and rate be r.
Amount after 5 years = 2P
Simple interest = A - P = 2P - P = P
According to the question,
P =
r = 20%
Rate = 20%
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:A man invests Rs. 10,000 for a year, out of which Rs. 4000 are invested at the rate of 5%, Rs. 3500 at the rate of 4% and the remaining at the rate of x%. If at the end of the year, he gets Rs. 500 as interest, then find the value of x.
Explanation
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:A sum of Rs. 4000 was lent partly at 6% and partly at 8% simple interest. If the interest received after one year is Rs. 272, find the ratio in which the money was lent, respectively.
Explanation
Suppose, Rs. x be lent at 6% and Rs. (4000 – x) at 8%.
Then,
6x + 32000 – 8x = 27200
2x = 32000 – 27200 = 4800
x = Rs. 2400
Thus, the two parts are Rs. 2400 and Rs. 1600.
So, required ratio = = 3 : 2
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:If the difference between compound interest and simple interest on a certain amount for two years is Rs. 7.35 and the rate of interest is 7%, then find the principal.
Explanation
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:In order to buy a car, a man borrowed Rs. 1,80,000 on the condition that he pay 7.5% interest every year. He would also pay the principal in equal annual installments spread over 21 years. After a certain number of years, the rate of interest reduced to 7%. It is also known that by the end of the agreed period, he will have paid in all Rs. 2,70,900 as interest. For how many years did he pay at the lesser interest rate?
Explanation
Let for x years he paid at 7.5%.
⇒ (13,500x - 12,600x) + 2,64,600 = 2,70,900
⇒ 900x = 2,70,900 - 2,64,600
⇒ 900x = 6300
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:Interest obtained on a sum of ₹ 5000 for 3 years is ₹ 1500. Find the rate percent.
Explanation
The interest earned per year would be 1500/3=500. This represents a 10% rate of interest.
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:₹ 1694 is repaid after two years at compound interest. Which of the following is the value of the principal and the rate?
Explanation
Let's consider the principal is Rs1400 and rate of interest is 10%.
then after 1st year the interest will be( Rs 1400 × 10% )= Rs140
After completing first year the principal amount will be :-
Principal + rate of interest = Rs ( 1400 + 140) =Rs 1540
In second the principal will be = Rs1540
Rate of interest will be same = 10%
Now after second year the interest will be :-
1540 × = Rs154
∴ After second year total repaid amount will be:-
=Principal of second year + interest after second year .
=Rs( 1540 + 154) =Rs 1694
Hence option d) matches with the question,
Ans :- Only option (d) matches with the question. there option (d) will be the correct answer.
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:Find the rate of interest if the amount after 2 years of simple interest on a capital of ₹ 1200 is ₹ 1440.
Explanation
Interest in 2 years = ₹ 240.
Interest per year = ₹ 120
Rate of interest = 10%
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Question for Practice Questions Level 1: Simple & Compound Interest - 1
Try yourself:What is the difference between the simple interest on a principal of ₹ 500 being calculated at 5% per annum for 3 years and 4% per annum for 4 years?
Explanation
5% for 3 years (SI) = 15% of the amount; At the same time 4% SI for 4 years means 16% of the amount. The difference between the two is 1% of the amount. 1% of 500 = ₹ 5
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