# Simple Interest Questions and Answers

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When it comes to basics of finance you have to learn about simple interest! Simple interest will affect you loans and investments and understanding this concept will make you money or lose you money.

In effect simple interest is a return on your investment or a price you have to pay for borrowing money from someone.

Let's say you invest 100 and earn 5% simple interest. After the investment period has ended you have made 100*0.05=5. Simple interest is the simplest of ideas in finance and one of the greatest.

To get a bit more deeper into interest please look at our compounded interest section here to learn more about interest and the formulas used to calculate it: Compound Interest Formula

A sum of money at simple interest amounts to 815 in 3 years and to 854 in 4 years. The sum is:

A. 650
B. 690
C. 698
D. 700

### Answer & Explanation:

Answer: Option C

Explanation: S.I. for 1 year = (854 - 815) = 39.

S.I. for 3 years = (39 x 3) = 117.

Principal = (815 - 117) = 698.

Mr. Thomas invested an amount of 13,900 divided in two different schemes A and B at the simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simple interest earned in 2 years be 3508, what was the amount invested in Scheme B?

A. 6400
B. 6500
C. 7200
D. 7500

### Answer & Explanation:

Answer: Option A

Explanation: Let the sum invested in Scheme A be x and that in Scheme B be (13900 - x).

Then, (x x 14 x 2)/100 + ((13900 - x) x 11 x 2)/100 = 3508

28x - 22x = 350800 - (13900 x 22)

6x = 45000

x = 7500.

So, sum invested in Scheme B = (13900 - 7500) = 6400.

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

A. 4462.50
B. 8032.50
C. 8925
D. None of these

### Answer & Explanation:

Answer: Option C

Explanation: Principal = (100 x 4016.25)/(9 x 5)

= 401625/45

= 8925.

How much time will it take for an amount of 450 to yield 81 as interest at 4.5% per annum of simple interest?

A. 3.5 years
B. 4 years
C. 4.5 years
D. 5 years

### Answer & Explanation:

Answer: Option B

Explanation: Time = (100 x 81)/(450 x 4.5) years = 4 years.

Reena took a loan of 1200 with simple interest for as many years as the rate of interest. If she paid 432 as interest at the end of the loan period, what was the rate of interest?

A. 3.6
B. 6
C. 18
D. Cannot be determined

### Answer & Explanation:

Answer: Option B

Explanation: Let rate = R% and time = R years.

Then, (1200 x R x R)/100 = 432

12R² = 432

R² = 36

R = 6.

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