How to Solve Simple Interest Problems for NID 2023?

What to expect from this article: 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 2023 entrance exam to familiarise you with the questions that may be asked in the exam.

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

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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 claInterestm; 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.

Tricks to Solve Simple Interest Questions for NID 2023

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 Rateinterest rate annually, and the Rate of Interest wiInterestnoted as capital 'R'.
• When you boInterestlend money, you will get the Time to return or return that money with Interest. That period is considered a timTimed is deInterestth 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.

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 principaInterestA 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.

Sample Simple Interest Problems for NID 2023

For example, 1: Sagar borrows Rs. 50,000 from a bank for five years. What is the Rate of simple Interest charged by the bank if, after five years, the claims to pay Rs? 66,000 to the bank?  

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 Rateinterest rate on which Sagar borrowed money from the interested us find out,

Sagar had borrowed Rs. 50,000, and he had to pay Rs. 66,000 after five years

Read more: Previous year exam analysis for NID entrance exam

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 Interestfind at what Rate of Interest per annum he is paying the claim to the banIntereste total simple Interest for five years is Rs. 16,000

So the simple Interest for one year will be 16000/5 = 3,200

Rate oInterestst = simple Interest is what percentage of theInterestal per ye interested below

Simple Interest = Rs. 3,200 for one year

Principal Amount =Interest000

Rate of interest = simple interest of 1 year/principal amounInterestRate of interest = 3200 / 50000 x 100

Rate of interest = 6.4 %

Read more: Important questions with answers for the NID CAT exam

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 more by solving one more example

For Example 2:

After how many years would pay an amount double itself at a 15% rate of simple Interest?

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

Explanation:

To give: Rate of simple Interest 15%

To find: At what timTimee the principal AmoInterest 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 

That 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.

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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 willInterestte the Time on 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 Interestuestions 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 get every trick and method to solve simple interest questions quickly. So practice these questions and enhance your preparation.

Read more: Important questions for the NID CAT exam

Question 1: Find the simple Interest on Rs. 7,200 at 8% per annum for ten monthsInterest0

1. Rs. 420
2. Rs. 450
3. Rs. 410
4. 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: SiInteresterest?

Solution: here principal = Rs. 7,200

Rate of Interest = 8% per annum

Time = 10/12 years = ⅚ years interest 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.

Read more: Important questions interested GAT exam

Therefore, the simple Interest is Rs. 480. 

Question 2: Find the simple interest Rs 14,600 at eight ¼ % per annum from 10Interest 2009 to 17th June 2009. 

1. Rs. 310
2. Rs. 320
3. Rs. 330
4. Rs. 340
5. 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

Question 3: Find the Amount oInterestcipal of Rs. 3,600 for two years and nine months at a rate of 8 ⅓ % per annum. 

1. Rs. 5,175
2. Rs. 4,425
3. Rs. 5,425
4. Rs. 4,175
5. 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

Read More: How to Solve Compound Interest Problems

Question 4: The simple Interest earned on a certain sum is Rs. 1,560 at 8% Interest in 2 years. Find the sum.

1. Rs. 9,630
2. Rs. 9.140
3. Rs. 9,750
4. Rs. 9,810
5. 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 

Question 5: A specific sum amounts to Rs. 7,080 in 2 years and Rs. 8,430 in 4 ½ years at simple Interest. Find the Rate of Interest.

1. 7%
2. 8%
3. 6%
4. 9%
5. NonInterestse

Answer: (d) 9%

EIntereston:

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 yeaInterestount 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

Interestnterest = 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.

Question 6: At what interests? Fourteen thousand four hundred give Rs. 4,032 as a simple interest in 3 years and six months?

1. 8%
2. 9%
3. 8 ½ %
4. 9 ½ %
5. 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. 1Interestmple 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 = (Interestmple 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% 

Question 7: At what timTimeInterest double itself at 8% per annum simple Interest?

1. 12 year
2. Ten year
3. 12 ½ year
4. 10 ½ year
5. None of these

Answer: (c) 12 ½ year

Explanation:

To give: The Rate of simple Interest is 8%

To find: At what timTimee the principal AInterestll 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 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 willInterestte 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.

Question 8: At what Rate will a sum increase by 25% in 2 years at Simple Interest?

1. 12 ½ %
2. 12%
3. 10 ½ %
4. 10%
5. 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

⇒ SInterestterest = 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. 12Interest 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. 

Question 9: At what tiInterestTim Rs. 5,000 amount to Rs. 5,800 at 8% per annum simple interest?

1. One year
2. Five year
3. Four year
4. Two year
5. 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 timTimetwo years.

Question 10: At what timTimeuld a sum double itself at 12 ½ % per annum simple interest?

1. 8 ⅓ year
2. 8 ½ year
3. 8 ¼ year
4. Eight year
5. 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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