August 4, 2024

**Overview: **In this article, you will learn how to solve simple interest problems for NID, and we have also compiled some sample simple interest questions for the NID 2025 entrance exam to familiarize you with the questions that may be asked in the exam.

Mastering simple interests is crucial for cracking the NID exam.

This guide will equip you with the essential formulas and problem-solving techniques. Let's dive in!

Simple Interest is Interest calculated on the principal portion of a loan or the original contribution to a saving account. Simple Interest does not compound, meaning an account holder will only gain Interest on the principal, and a borrower will never have to pay Interest on Interest already accrued.

It is a sum that the borrower pays to the lender for using the money for a specific period. The money borrowed is the principal.

The Rate at which the Interest is calculated on the principal is called the Rate of Interest. The Time for which the money is borrowed is the TIME, and the total sum of principal and Interest is called the AMOUNT.

Simple Interest is the Interest calculated on the original principal at any Interest rate for any period; then, it is called simple Interest.

- If P = Principal,
- R = Rate per cent per annum,
- T = Number of years,
- SI = Simple Interest and
- A = Amount

Then,

73 days = ⅕ yr

146 days = ⅖ yr

219 days = ⅗ yr

292 days = ⅘ yr

The formula of simple Interest is:

**Simple Interest**= Principal x period x Rate of Interest / 100**Principal**= 100 x Simple Interest / Rate of Interest x period**Rate of Interest**= 100 x Simple Interest / Principal x period**Time**= 100 x Simple Interest / Principal x Rate of Interest**Amount**= Principal x Simple Interest

Here, the Interest is calculated on the original principal, i.e., the principal, to calculate the interest; it remains constant throughout the period. The Interest earned on the principal is not considered to estimate Interest for later years.

In this article, you will learn how to solve simple interest problems for **NID entrance exam**.

The key to success in the exam is planning a **well-structured study plan for NID** and executing it effectively.

Before solving the simple interest problems for NID, we should know all the parameters which will help in solving simple interest problems.

- Some terms are used in a simple interest question whenever a certain amount is borrowed, lent, credited, debited, or invested. You need to understand that this money will be considered the principal Amount.
- This money is given at a specific interest rate whenever this Amount is borrowed or lent. Still, if the question is not mentioned, winters consider the interest rate annually, and the Rate of Interest will be denoted as capital 'R'.
- When you lend money, you will get the Time to return or return that money with Interest. That period is considered a time is denoted as the capital 'T.'
- When you solve simple interest questions, you have to know how to convert percentages to fraction form, making it easy to solve the question.

**Check: NID 2025 Exam Updates**

The fractional value of 25% is ¼, the fractional value of 20% is ⅕, and the fractional value of 33.33% is ⅓.

For example: In a question, the interest rate is 8.33% per annum, so that it will be 1/12 in the fractional form. Here that 1/12 means that 12, the denominator, is the principal Amount and 1, the numerator is the Interest when you have received or paid the principal interest in one year.

To help you get an idea about the type of questions asked in the exam, we have curated a few sample questions from the **previous year's NID Question papers**.

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**For example,**

**Answer: 6.4 %**

**Solution:**

This question can be solved in a fraction of a second using the simple interest formula. Still, we will solve it by a different method so that you can easily understand the simple interest concept.

Once you have understood the simple interest concept, you can quickly solve any question related to a simple interest in seconds.

To given: Sagar has borrowed Rs. 50,000 from a bank for five years

- And, after five years, Sagar will pay Rs. 66,000 to the bank.
- To find the Rate of interest on which Sagar borrowed money,
- Sagar had borrowed Rs. 50,000, and he had to pay Rs. 66,000 after five years
- So, in this case, we can say that the additional Amount Sagar is paying is our simple Interest.
- So, we will see the additional Amount by an attractive Rs. 50,000 from Rs. 66,000.
- The additional amount he will pay as a simple interest will be 66,000 - 50,000 = 16,000.
- So, the simple Interest for five years will be Rs. 16,000
- Now, we find at what Rate of Interest per annum he is paying the claim to the total simple Interest for five years is Rs. 16,000
- So the simple Interest for one year will be 16000/5 = 3,200
- Rate of interests = simple Interest is what percentage of the interest per year is mentioned below:
- Simple Interest = Rs. 3,200 for one year
- Principal Amount =Interest000
- Rate of interest = simple interest of 1 year/principal amount Interest
- Rate of interest = 3200 / 50000 x 100
- Rate of interest = 6.4 %

**So, the Rate of Interest on which Sagar will pay the claim to the interest year will be 6.4%**

Let us understand the concept better by solving another example-

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**Check: Important questions with answers for the NID CAT exam**

**For Example 2:**

**Answer: in 7 years, approximately the investment will be doubled.**

**Explanation:**

To give: Rate of simple Interest 15%

To find: At what time the principal amount be doubled?

Solution:

First, we will convert percentages into a fraction

So,

- 5% = 1/20
- 10% = 1/10
- 15% = 3/20

When you have converted percentages into a fraction, it means

15% = 3 / 20

As mentioned above, if the interest rate is given in percentage and we have converted that into a fraction, then the numerator will be assumed as the interest amount. The denominator will be considered the principal Amount.

So, in this case

- The Rate of Interest is 15 % which is 3 / 20.

So this means that 3 is the interest amount, and 20 will be the principal Amount.

This means that if you have invested Rs. 20, after one year, you will get Rs. 3 as Interest earned.

So, we have to determine when the Interest invested will be doubled. Does this mean when you will get that much Interest equal to the invested capital?

Now, we will calculate the Time, in how many years the invested money is doubled.

- ⇒ Invested money = interest earned per annum X 'n' number of timTime20 = 3 x n
- ⇒ n = 20 / 3
- ⇒ n = 6.66 years
- ⇒ n = 7 years approx.

**So, in 7 years, the money invested will be doubled when the Interest is earned at 15% per annum.**

These are some questions mentioned below to show you how to solve simple interest questions for the NID examination. These questions will help you to quickly understand the format to solve the simple interest questions for the NID examination.

By solving these questions, you will find that the simple interest questions are easy to solve and very scoring. You will learn various tricks and methods to solve simple interest questions efficiently. Practice these techniques to strengthen your preparation.

**Check: Important questions for the NID CAT exam**

- Rs. 420
- Rs. 450
- Rs. 410
- None of these

**Answer: (a) Rs. 480**

**Explanation:**

- To Given: Principal Amount - Rs. 7,200
- Rate of Interest = 8% per annum
- Time = 10 months
- To find: simple interest?
- Solution: here principal = Rs. 7,200
- Rate of Interest = 8% per annum
- Time = 10/12 years = ⅚ years interest = (Principal x Time x Rate of Interest / 100)
- ⇒ SI = (P x T x R / 100)
- ⇒ Simple Interest = (7200 x ⅚ x 8 / 100)
- ⇒ Simple Interest = 60 x 8
- ⇒ Simple Interest = Rs. 480.

**Therefore, the simple Interest is Rs. 480.**

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- Rs. 310
- Rs. 320
- Rs. 330
- Rs. 340
- None of these

**Answer: (e) None of these**

**Explanation:**

- To given: principal amount = Rs. 14,600
- Rate of interest = 8 ¼ %
- Time = 10th March 2009 to 17th June 2009.
- To find: Simple Interest?
- Solution: Here
- Principal Amount = Rs. 14, Interest of interest = 8 ¼ % = 33/4 % per annum
- Time = March + April + May + June
- ⇒ Time = 21 days + 30 days + 31 days + 17 days
- ⇒ Time = 99 days.
- ⇒ Simple Interest = (Principal x Time x Rate of Interest / 100)
- ⇒ SI = (P x T x R / 100)
- ⇒ Simple Interest = (14600 x 33/4 x 99/365 / 100)
- ⇒ Simple Interest = (14600 x 33/4 x 99/365 x 1/100)
- ⇒ Simple Interest = (146 x 33/4 x 99/365)
- ⇒ Simple Interest = Rs. 326.70

**Therefore, the simple Interest is Rs. 326.70**

**Check: NID GAT Important Questions PDF**

- Rs. 5,175
- Rs. 4,425
- Rs. 5,425
- Rs. 4,175
- None of these

**Answer: (b) Rs. 4,425**

**Explanation:**

- To Given: Principal amount = Rs. 3,600
- Rate of Interest = 8 ⅓ % per annum
- Time = 2 years and nine months
- To Find: Simple Interest and Total Amount
- Solution: Here
- Principal Amount = Rs. 3,600
- Rate of Interest = 8 ⅓ % = 25/3 %
- Time = 2 years and nine months
- ⇒ Time = (2 x 12) + 9 / 12 years
- ⇒ Time = 33/12 years
- ⇒ Time = 11/4 years
- ⇒ Simple Interest = (Principal x Time x Rate of interest / 100)
- ⇒ SI = (P x T x R / 100)
- ⇒ Simple Interest = (3600 x 11/4 x 25/3 / 100)
- ⇒ Simple Interest = (3600 x 11/4 x 25/3 x 1/100)
- ⇒ Simple Interest = (36 x 11/4 x 25/3)
- ⇒ Simple Interest = (3 x 11 x 25)
- ⇒ Simple Interest = Rs. 825

**Therefore, the Simple Interest is Rs. 825.**

- ⇒ Total Amount to be paid = Principal Amount + Simple Interest
- ⇒ Total Amount to be paid = P + SI
- ⇒ Total amount to be paid = 3600 + 825
- ⇒ Total Amount to be paid = Rs. 4,425.

**Therefore, the Total Amount to be paid is Rs. 4,425**

**Check: How to Solve Compound Interest Problems**

- Rs. 9,630
- Rs. 9.140
- Rs. 9,750
- Rs. 9,810
- None of these

**Answer: (c) Rs. 9750**

**Explanation: **

To Given: Simple Interest = Rs. 1,560

Rate of Interest = 8% per annum

Time = 2 years

To find: the sum or Principal Amount

Solution: Here

- Simple Interest = Rs. 1,560
- Rate of Interest = 8% per annum
- Time = 2 years
- Let the principal Amount be 𝒙
- ⇒ Simple Interest = (Principal x Time x Rate of Interest / 100)
- ⇒ Simple Interest = (P x T x R / 100)
- ⇒ 1560 = (𝒙 x 2 x 8/100)
- ⇒ 1560 = (𝒙 x 2 x 2/25)
- ⇒ 1560 = 4𝒙 / 25
- ⇒ 𝒙 = 1560 x 25 / 4
- ⇒ 𝒙 = 9750

**Therefore, the Principal Amount = Rs. 9,750**

**Check: Points to remember before appearing for NID exam**

- 7%
- 8%
- 6%
- 9%
- None

**Answer: (d) 9%**

**Explanation:**

- To given: Amount in 4 ½ years = Rs. 8,430
- Amount in 2 years = Rs. 7,080
- To Find: Rate of Interest?
- Solution: Here
- Amount in 4 ½ years = Rs. 8,430
- Amount in 2 years = Rs. 7,080
- First, we will find simple Interest for 2 ½ years
- Then after calculating simple Interest for 2 ½ years
- We will calculate simple Interest for two years
- ⇒ Simple Interest for 2 ½ year = Amount in 4 ½ years - Amount in 2 years)
- ⇒ Simple interest for 2 ½ years = (8430 - 7080)
- ⇒ Simple Interest for 2 ½ years = Rs. 1,350
- ⇒ Simple Interest for 2 years = (1350 x ⅖ x 2)
- ⇒ Simple Interest for 2 years = (270 x 4)
- ⇒ Simple Interest for 2 years = Rs.1,080

Now, we will find the principal Amount.

- ⇒ Principal = (Amount in 2 years) - (Simple Interest for two years)
- ⇒ Principal = (7080) - (1080)
- ⇒ Principal = (7080 - 1080)
- ⇒ Principal = Rs. 6,000
- After calculating the Principal Amount,
- we will calculate the Rate of Interest
- Now,
- Principal = Rs. 6,000
- Time = 2 years
- Smole interest = Rs. 1,080
- ⇒ Rate of Interest = (100 x Simple Interest / Principal x Time)
- ⇒ Rate of Interest = (100 x SI / P x T)
- ⇒ Rate of Interest = (100 x 1080 / 6000 x 2)
- ⇒ Rate of Interest = (108 / 12)
- ⇒ Rate of Interest = 9 % per annum.

**Therefore, the Rate of Interest = is 9 % per annum.**

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- 8%
- 9%
- 8 ½ %
- 9 ½ %
- None of these

**Answer: (a) 8%**

**Explanation:**

- To Given: Principal = Rs. 14,400
- Time = 3 ½ years
- Simple Interest = Rs. 4,032
- To Find the Rate of Interest per annum.
- Solution: Here
- Principal = Rs. 1 Simple Interest = Rs. 4,032
- Time = 3 ½ years
- Rate of Interest per annum =?
- ⇒ Time = 3 ½ years
- ⇒ Time = 7Interest
- Now, we will calculate the Rate of Interest per annum.
- ⇒ Rate of interest per annum = (Interest / Principal x Time)
- ⇒ R = (100 x SI / P x T)
- ⇒ Rate of Interest = (100 x 4032 / 14400 x ⅖)
- ⇒ Rate of Interest = (100 x 4032 x 2 / 14400 x 7)
- ⇒ Rate of Interest = (8064 / 1008)
- ⇒ Rate of Interest = 8 % per annum

**Therefore, the Rate of Interest per annum = 8%**

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- 12 year
- Ten year
- 12 ½ year
- 10 ½ year
- None of these

**Answer: (c) 12 ½ year**

**Explanation:**

To give: The Rate of simple Interest is 8%

To find: At what time the principal amount be doubled?

Solution:

First, we will convert percentages into a fraction.

So,

- 5% = 1/20
- 10% = 1/10
- 8% = 2/25

When you have converted percentages into a fraction

It means

That 8% = 2 / 25

As mentioned above, if the interest rate is given in percentage and we have converted that into a fraction, then the numerator will be assumed as the interest amount. The denominator will be considered the principal Amount.

So, in this case

- The Rate of Interest is 8 % which is 2 / 25.
- So this means that Interest amount and 25 will be the principal Amount.
- If you have invested Rs. 25, you will get Rs. 2 as Interest earned after one year.
- So, now we have to interest when the money invested will be doubled. Does this mean when you will get that much Interest equal to the invested capital?
- Now, we will calculate the Time on how many years the invested money is doubled.
- ⇒ Invested money = interest earned per annum X 'n' number of timTime25 = 2 x n
- ⇒ n = 25 / 2
- ⇒ n = 12.5 years
- ⇒ n = 12 ½ years

**So, in 12 ½ years, the money invested will be doubled when the Interest is earned at 8% per annum.**

**OR **

We interstate Time one more method i.e.

- Let the sum be Rs. 100
- It is given in the question that the Amount is double the sum
- So,
- The Amount be Rs. 200
- ⇒ Simple Interest = Amount - Principal
- ⇒ Simple Interest = 200 - 100
- ⇒ Simple Interest = Rs. 100

Now,

- ⇒Time = (100 x Simple Interest / Principal x Rate of Interest)
- ⇒ Time = (100 x SI / P x R)
- ⇒ Time = (100 x 100 / 100 x 8)
- ⇒ Time = 100 / 8
- ⇒ Time = 25 / 2 years
- ⇒ Time = 12 ½ years

**Therefore, in 12 ½ years, the sum will be doubled.**

**Check: NID Exam Admission 2025**

- 12 ½ %
- 12%
- 10 ½ %
- 10%
- None of these

**Answer: (a) 12 ½ %**

**Explanation:**

To Find Rate of Interest.

Solution:

- Let the sum be Rs. 100
- Then, the Amount will be 25% extra of the sum
- So, the amount = Rs. 125
- Now, according to the above information, we will calculate simple Interest.
- ⇒ Simple Interest = Amount - Principal
- ⇒ Simple Interest = A - P
- ⇒ Simple Interest = 125 - 100
- ⇒ Simple Interest = Rs. 25

Now, we will calculate the interest rate per annum after calculating simple Interest.

Here,

- Principal = Rs. 100
- Amount = Rs. 12 Interest Interest = Rs. 25
- Time = 2 years
- ⇒ Rate of Interest = (100 x Simple Interest / Principal x Time)
- ⇒ Rate of Interest = (100 x SI / P x T)
- ⇒ Rate of Interest = (100 x 25 / 100 x 2)
- ⇒ Rate of Interest = 25 / 2
- ⇒ Rate of Interest = 12 ½ % per annum.

**Therefore, the Rate of Interest = is 12 ½ % per annum.**

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- One year
- Five year
- Four year
- Two year
- None of these

**Answer: (d) 2 years.**

**Explanation:**

- To Given: Principal = Rs. 5,000
- Amount = Rs. 5,800
- Rate of Interest = 8% per annum
- To find: Time =?
- Solution: Here
- Principal = Rs. 5,000
- Amount = Rs. 5,800
- Rate of Interest = 8% per annum.

Now,

We will calculate Simple Interest

- ⇒ Simple Interest = Amount - Principal
- ⇒ Simple Interest = A - P
- ⇒ Simple Interest = 5800 - 5000
- ⇒ Simple Interest = Rs. 800
- After calculating simple Interest,
- We have Principal = Rs. 5,000
- Amount = Rs.Interstate of Interest = 8% per annum
- Simple Interest = Rs. 800
- Now, we have to calculate Time
- ⇒ Time = (100 x Simple Interest / Principal x Rate of Interest)
- ⇒ T = (100 x SI / P x R)
- ⇒ Time = (100 x 800 / 5000 x 8)
- ⇒ Time = (10 / 5)
- ⇒ Time = 2 years

**Therefore, the time is two years.**

**Check: ****Important questions interested GAT exam**

- 8 ⅓ year
- 8 ½ year
- 8 ¼ year
- Eight year
- None of these

**Answer: (d) 8 year**

**Explanation:**

To Given: The Rate of simple Interest is 12 ½ %

To find: At what timTimee will principInterestAt be doubled?

Solution:

We can calculate timTime one more method i.e.

Let the sum be Rs. 100

It is given in the question that the Amount is double the sum

So,

The Amount be Rs. 200

- ⇒ Simple Interest = Amount - Principal
- ⇒ SI = A - P
- ⇒ Simple Interest = 200 - 100
- ⇒ Simple Interest = Rs. 100
- Now,
- ⇒Time = (100 x Simple Interest / Principal x Rate of Interest)
- ⇒ Time = (100 x SI / P x R)
- ⇒ Time = (100 x 100 / 100 x 25/2)
- ⇒ Time = (100 x 100 x 2 / 100 x 25)
- ⇒ Time = 200 / 25
- ⇒ Time = 8 years
- ⇒ Time = 8 years

**Therefore, in 8 years, the sum will double itself.**

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**NID Online Mock Tests**are available for self-assessment.- Get access to valuable simple and compound interest problems with solutions.
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In conclusion, this article effectively equips NID 2025 aspirants with the essential methods and strategies for mastering simple interest problems. It provides a clear explanation of the fundamental concepts, a step-by-step approach to solving problems, and practical examples to enhance understanding.

With the resources and tips offered, candidates can approach their exam preparation with greater confidence and precision.

- Simple interest questions can be presented in various ways.
- Practice solving different types of problems to improve your skills.
- Learn time-saving methods to solve problems efficiently.
- Review incorrect answers to identify areas for improvement.

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