Financial Mathematics – Simple Interest MCQs with Answers

#### 1. In 4 years the simple interest on certain sum of money is 9/25 of the principal. The annual rate of interest is:

#### 2. Aslam invested some money in a bank at the rate of 6% per annum. At simple interest, after 9 years, he got Rs. 8470. How much did he invest?

#### 3. In 40 years an amount becomes 6 times the original amount. What is the rate of interest?

#### 4. The interest is a:

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#### 5. An amount of Rs.20,000 is due in three months. The present value if it includes simple interest @8% is:

#### 6. How long will it take for a sum of money to double itself at 10% simple interest?

#### 7. The present value of Rs.1,400 at 8 percent simple interest for 5 years is:

#### 8. Future value of Rs.1,355/- invested @ 8% p.a. for 5 years is:

#### 9. The formula for simple interest is:

#### 10. What time will be taken by an amount of Rs. 900 to yield Rs. 81 as interest at 4.5% per annum of simple interest?

#### 11. Interest is:

#### 12. What will be the simple interest on Rs. 700 at 9% per annum for the period from February 5, 1994 to April 18, 1994?

#### 13. What is the rate of simple interest for the first 4 years if the sum of Rs. 360 becomes Rs. 540 in 9 years and the rate of interest for the last 5 years is 6%?

Original sum = Rs 360Total interest in 9 years = 540 - 360 = 180Interest in last 5 years = 5 x 6 = 30%= 30/100 x 360 = Rs 108=> Interest in first four years :180 - 108 = Rs 72Interest per annum = 72/4 = 18Rate of interest for first four years = 18/360 x 100 = 5%Check :Interest for four years = 4 x 5 = 20%Interest for next five years = 5 x 6 = 30%Total interest = 20% + 30% = 50%Now 50% of 360 = Rs 180

#### 14. Find the rate of interest if the amount after 2 years of simple interest on a capital of Rs. 1200 is Rs. 1440.

#### 15. A sum fetched a total simple interest of Rs. 4016.25 at the rate of 9 p.c.p.a. in 5 years. What is the sum?

#### 16. Find the simple interest on Rs. 5200 for 2 years at 6% per annum.

Solution: P = Principal Amount T = Time period R = Rate of Interest I=P×T×R /100 I=5200×2×6 / 100 I=624.

#### 17. Rs. 1200 is lent out at 5% per annum simple interest for 3 years. Find the amount after 3 years.

#### 18. Interest obtained on a sum of Rs. 5000 for 3 years is Rs. 1500. Find the rate percent.

#### 19. Rs. 2100 is lent at compound interest of 5% per annum for 2 years. Find the amount after two years

#### 20. Find the difference between the simple interest and the compound interest at 5% per annum for 2 years on principal of Rs. 2000.

#### 21. Mr. Smith deposited $40, 000 in a bank and earned simple interest at 7 % per annum for two years. Calculate the interest earned at the end of the period.

#### 22. How much simple interest is due on a loan of US$120 for two years if the annual rate of interest is 5 ½ %.

#### 23. A man wishes to invest $1500. He can invest in Kings Investment club, which pays simple interest of 8%for 3 years. What is the amount in his account after 3 years?

#### 24. Calculate the time T for $1000 to become$1300 at a rate of 5 %

Feedback Time T = SI X 100/P X R Amount = P + I 1300 = 1000 + I I =300 Substitute in formula T = 300 X 100 / 1000 X 5 = 6 years