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An automobile financier claims to be lending money at simple interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes:
10%
10.25%
10.5%
None of these

Read Solution (Total 3)

If invested money is 100 then in first six month interest is 100*0.1*1/2=5
Total 100+5=105
In the second six month interest is=105*.1*1/2=5.25

So total 105+5.25=110.25

So rate is 10.25
Answer is B
12 years agoHelpfull: Yes(9) No(2)

Let the sum be Rs. 100. Then,

S.I. for first 6 months = Rs. 100 x 10 x 1 = Rs. 5
100 x 2
S.I. for last 6 months = Rs. 105 x 10 x 1 = Rs. 5.25
100 x 2
So, amount at the end of 1 year = Rs. (100 + 5 + 5.25) = Rs. 110.25

Effective rate = (110.25 - 100) = 10.25%
6 years agoHelpfull: Yes(1) No(0)
10% because it is eas
6 years agoHelpfull: Yes(0) No(1)

Infosys Other Question

A person takes a loan of 200 at 5% simple interest. He returns 100 at the end of 1 year. In order to clear his dues at the end of 2 years, he would pay:
105
110
115
115.50 A sum of 725 is lent in the beginning of a year at a certain rate of interest. After 8 months, a sum of 362.50 more is lent but at the rate twice the former. At the end of the year, 33.50 is earned as interest from both the loans. What was the original rate of interest?
3.6%
4.5%
5%
6%
None of these