Simple Interest Test Questions With Answers

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Simple Interest Test Questions With Answers - Quiz

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.


Questions and Answers
  • 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

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

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  • 2. 

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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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

    Correct Answer
    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
    ProProfs Editorial Team
  • Mar 07, 2009
    Quiz Created by
    Rugeokin
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