Management Aptitude Test Dec 2012 Paper

Question : 94 of 200

Marks: +1, -0

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

Validate

Solution:

(b) Let principal amount = ₹ 100
In first six months, SI =

{100×5×1}/100

= ₹ 5
∴ Amount after six months =₹ 105
Now, SI for next six months =

{105×5×1}/100

= ₹ 5.25
∴ Amount = ₹ 110.25
Effective rate = 110.25 - 100 = 10.25%

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