Interest calculations in simple terms - Exercises and Solutions for Aptitude Tests

Interest calculations in simple terms - Exercises and Solutions for Aptitude Tests

In the realm of Quantitative Aptitude, there's a key topic you'll wanna wrap your head around: Simple Interest. It's essential for various competitive exams, such as SSC, Bank, and more. The gist of it is figuring out the interest earned or paid on a loan over a given period of time.

Here are some topics you should have under your belt before diving in:

• Good grasp of what Simple Interest is
• Tricks and shortcuts for solving Simple Interest problems

Now, let's put on our thinking caps and roll up our sleeves for some fun Simple Interest mathematical puzzles!

Sample Problem 1: What's the annual interest accrued on a deposit of ₹10,000 in a bank offering a 4% per annum rate of Simple Interest?

• Solution: Simply plug the numbers into the formula: SI = P x R x T / 100
• Top tip: Write it out in full to remind yourself: SI = Principal x Rate x Time / 100

Problem 2: If a sum of money amounts to ₹28,000 in 2 years at 20% simple interest per annum, find the sum.

• Solution: Once again, we'll be using the SI formula, but this time we'll be solving for the principal.
• Top tip: Double check your calculations to make sure your work is accurate!

Problem 3: A man borrowed a certain sum of money at the rate of 6% per annum for the first two years, 9% per annum for the next three years, and 14% per annum for the period beyond 5 years. If he pays a total interest of ₹22,800 at the end of 9 years, find the amount he borrowed.

• Solution: Make sure to break down the loan into its individual parts and calculate the interest for each period.
• Top tip: Remember to convert annual interest rates to decimal form.

Problem 4: At what annual rate of interest will a sum of money be thrice in 10 years?

• Solution: The interest will be three times the principal amount after 10 years. You can figure this out by setting up an equation and solving for the rate of interest.
• Top tip: The formula for calculating the interest is A = P(1 + rate of interest)^t

Problem 5: The simple interest on a sum of money in 5 years at 12% per annum is ₹400 less than the simple interest accrued on the same sum in 7 years at 10% per annum. Find the sum.

• Lets tackle this one using algebra. Let the sum be x, the simple interest after 5 years is 6x (12% of x), and after 7 years is 7x (10% of x).
• The difference is 7x - 6x - 400 = 1x, solving this equation will give the value of the sum.

Problem 6: A sum of ₹1000 was lent to two people, one at the rate of 5% and the other at the rate of 8%. If the simple interest after one year is ₹62, find the sum lent at each rate.

• We can solve this one by plugging each rate into the SI formula and then setting up an equation to find the sums.

Problem 7 (Bonus): Calculate the simple interest on a loan of $2,000 taken for 2 years at an interest rate of 6% per year in Hong Kong.

• Here, we need to know the currency conversion rate between US dollar and Hong Kong dollar, which is approximately 7.75 as of now. But for this problem, let's work with USD to make calculations simpler.
• However, if you're dealing with foreign currencies, remember to consider exchange rates when calculating the interest.

As you can see, Simple Interest is all about understanding the basics and applying them wisely. With practice, you'll be acing those tricky questions in no time!

Now, let's dive deeper into the topic of Simple Interest and discover complex scenarios, advanced formulas, and essential tips for mastering its intricacies.

Advanced Concepts in Simple Interest:

Basic Formula (Recap):[ \text{SI} = \frac{P \times R \times T}{100} ]

In complex scenarios, you may find problems involving installment payments or multiple interest rates. To tackle such problems, keep these tips in mind:

1. Break down large problems into smaller, manageable parts. This will make the problem easier to understand and solve.
2. Apply problem-solving strategies and techniques, such as the concept of "worksmart," to tackle complex issues more efficiently.
3. Understand the relevance of the problem to real-world scenarios as this can help you retain information and boost your problem-solving skills.

Integrating Insights:Once you've got the basics down, you can expand your knowledge of Simple Interest by tackling more complex scenarios, learning additional formulas, and applying your skills to a variety of real-world situations. Mastering these skills will give you a solid foundation for tackling various quantitative problems in your competitive exams and beyond.

To take your understanding of Simple Interest to the next level, explore the following advanced topics:

1. Installment Payments: In situations where payments are made in installments, calculating the interest on the reducing principal can be complex. To tackle such scenarios, you'll need to understand how to calculate the interest for each payment period and make any necessary adjustments to the principal amount.
2. Compound Interest on Simple Interest: Though less common, understanding how compound interest applies to simple interest calculations can be beneficial. This topic involves finding the total amount of a loan after several compounding periods, where the interest is calculated using a simple interest formula.
3. More Complex Scenarios: There are several other advanced scenarios you may encounter when dealing with simple interest, such as solving for multiple unknowns, calculating simple interest for uneven time periods, and solving problems involving annuities.
4. After mastering the basics of Simple Interest, venture into the realm of education-and-self-development platforms to find practice problems related to finance, investing, and personal-finance, which can help enhance problem-solving skills and provide practical insights.
5. Furthermore, as you progress, explore advanced topics such as technology-driven solutions for complicated Simple Interest problems, including installment payments and compound interest on Simple Interest.
6. To stay ahead in competitive exams like SSC, Bank, and others, commit to regular practice, applying the learned concepts to various real-life finance scenarios and personal-finance decisions.

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