This page is all about simple interest multiple choice questions. All the questions are extremely important as they are repeatedly asked in exams so make sure you practice each of them.
In case if you are unclear about any step, i would suggest you to read the theory about this chapter first and then dive into problem solving.
Simple Interest MCQ
(01) With a given rate of simple interest, the ratio of Principal and amount for a certain period of time is 4:5. After 3 years, with the same rate of interest, the ratio of the principal and amount becomes 5:7. The rate of interest is:
a. 5%
b. 6%
c. 5.5%
d. 4.5%
Sol: P + SI after t years = 5x ………… (i)
P : P + SI after (t+3) years = 4x : 7/5 × 4x = 4x : 28x/5
P + SI after (t+3) years = 28x/5 ,,,,,,,,,,,,,,,,, (ii)
Eq (i) – Eq (ii);
SI after 3 years = 28x/5 – 5x = 3x/5
(02) Ramesh deposited Rs. 15600 in a fixed deposit at the rate of 10% per annum simple interest. After every second year, he adds his interest earnings to the principal. The interest at the end of fourth year is:
a. Rs. 2764
b. Rs. 1542
c. Rs. 3744
d. Rs. 4000
Principal for next two years = Rs. ( 15600 + 3120 ) = Rs. 18720
(03). What equal instalment of annual payment will discharge a debt which is due as Rs. 848 at the end of 4 years at 4% per annum simple interest?
a. 100
b. 200
c. 300
d. 400
Sol: Let the annual instalment be Rs. x
28x/ 25 + 27x/25 + 26x/25 + x = 848
106x = 848 × 25
x = 200
(04) If Rs. 12,000 is divided into two parts such that the simple interest on the first part for 3 years at 12% per annum is equal to the simple interest on the second part for 4![]()
years at 16% per annum, the greater part is
a. Rs. 6000
b. Rs. 7000
c. Rs. 8000
d. Rs. 9000
36P1 = 72P2
P1 / P2 = 72 / 36 = 2 : 1
Thus, the greater part = 2/3 × 12000 = Rs. 8000
(05) Out of Rs. 50,000, that a man has, he lends Rs. 8000 at 5![]()
% per annum simple interest and Rs. 24,000 at 6% per annum simple interest. He lends the remaining money at a certain rate of interest so that he gets total annual interest of Rs. 3680. The rate of interest per annum, at which the remaining money is lent, is:
a. 5%
b.15%
c. 7%
d. 10%
Sol: Remaining amount = Rs. [ 50,000 – ( 8000 + 24000 ) ] = Rs. 18000
440 + 1440 + 180r = 3680
180r = 3680 – 1440
r = 1800 / 180 = 10%
(06). What annual instalment will discharge a debt of Rs. 6450 due in 4 years at 5% simple interest?
a. Rs. 900
b. Rs. 1000
c. Rs. 1500
d. Rs. 2000
(07) In how many years, will the simple interest on a sum of money be equal to the principal at the rate of 50/3![]()
% per annum?
a. 6 years
b. 4 years
c. 9 years
d. 10 years
(08) The difference between the simple interest received from two different banks on Rs. 500 for 2 years is Rs. 2.50. The difference between their (per annum) rate of interest is
a. 1%
b. 0.25%
c. 0.75%
d. 1.25%
1000 (R1 – R2) = 250
R1 – R2 = 250 / 1000 = 0.25
Hence the difference of rate of interest is 0.25% per annum
(09) A sum of money was invested at a certain rate of simple interest for 2 years. Had it been invested at 1% higher rate, it would have fetched Rs. 24 more interest. The sum of money is:
a. Rs 1200
b. Rs. 1600
c. Rs. 1500
d. Rs. 1250
More interest paid in 2 years = 2 × 1 = 2%
2% of sum = Rs. 24
1% of sum = Rs. 24 / 2 = Rs. 12
Total sum = Rs. 12 × 100 = Rs. 1200
(10) A man invests half of his capital at the rate of 10% per annum, one third at 9% and the rest at 12% per annum. The average rate of interest per annum, which he gets is
a. 9%
b. 5%
c. 10%
d. 11%
Let the total amount = Rs. 6
Hence the average rate of interest is 10%