# Simple Interest Test Questions With Answers

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How quickly you can solve simple interest practice problems? Take these simple interest test questions with answers and check your problem-solving skills. This test involves using the simple interest formula, i.e., SI = P × R × T, to find principal P, amount A, Rate R, Time in years, and Simple Interest SI. Let's begin the quiz and learn about the same topic. The quiz will not be hard for you if your basic concept is good regarding simple interests.

• 1.

### 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.

• A.

\$ 4000

• B.

\$2800

• C.

\$5600

• D.

\$3400

• E.

\$200

C. \$5600
Explanation
Interest is PRT/100, 40000 X 7 X 2 /100 = 5600

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• 2.

### Principal + Interest = ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Amount, amount
Explanation
P + I = A ( amount) accruing

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• 3.

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

• A.

\$12

• B.

\$13.20

• C.

\$26.40

• D.

\$26

• E.

\$33

B. \$13.20
Explanation
I = PRT/100 P= 120, R= 5.5%, Time = 2 years, Warning if time in months always express it iterms of years, by put the month value over 12

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• 4.

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

• A.

\$18321

• B.

\$1860

• C.

\$1830

• D.

\$1524

• E.

\$5024

B. \$1860
Explanation
I = 1500 X 8 X 3/100 I = \$360 Amount = Principal + Interest A = 1500 + 360 1860

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• 5.

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

• A.

3 years

• B.

6 years

• C.

9 years

• D.

6. 5 months

• E.

10 years

B. 6 years
Explanation
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

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• 6.

### Find the sum that amounts to \$2040 in 6 months at 4 %

• A.

\$ 200

• B.

\$2000

• C.

\$1300

• D.

\$2400

• E.

\$1020

B. \$2000
Explanation
P = I X 100/R X T
A (amount) =\$2040
p = A- I
I = 2040 - P
I = PRT/100
2040- P = PX4X6/100X12
2040 - p =P/50
2040 = P + p /50
2040 = 51P/50
P= \$2000

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• 7.

### When you borrow money from the bank you pay

interest
Simple Interest
Explanation
When you borrow money from the bank, you are required to pay interest. Interest is the additional amount of money that the bank charges for lending you the money. It is a percentage of the borrowed amount and is added to the total repayment amount. Simple interest is a straightforward method of calculating interest, where the interest is calculated only on the initial borrowed amount and does not take into account any additional factors such as compounding.

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• 8.

### The amount of money borrowed or invested is called

Principal, principal
Explanation
The amount of money borrowed or invested is referred to as the principal. This is the initial sum of money that is either borrowed from a lender or invested by an individual. The principal amount is the basis on which interest or returns are calculated. It is an essential concept in finance and plays a significant role in various financial transactions such as loans, mortgages, and investments.

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• 9.

### .............................the percent charged or earned

Rate of interest
Rate
Explanation
The term "rate of interest" refers to the percentage charged or earned in relation to a loan or investment. It is commonly used to calculate the amount of interest that will be accrued over a specific period of time. The word "rate" in this context is synonymous with "percentage" and is used to indicate the proportion or fraction of the principal amount. Therefore, the correct answer is "Rate of interest" as it accurately describes the concept of the percent charged or earned.

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• 10.

### A sum of money at SI amounts to Rs. 815 in 3 year and Rs. 854 in 4 years. What is the sum?

• A.

Rs. 690

• B.

Rs. 698

• C.

Rs. 700

• D.

Rs. 750

• E.

Rs. 780

B. Rs. 698
Explanation
S.I. for 1 year will be Rs. (854 - 815) = Rs. 39
S.I. for 3 years will be Rs.(39 x 3) = Rs. 117
Hence, Principal = Rs. (815 - 117) = Rs. 698

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• Current Version
• Aug 21, 2023
Quiz Edited by
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• Mar 07, 2009
Quiz Created by
Rugeokin

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