Multiple Choice Questions on An automobile financer claims to be lending money at simple interest but he includes the interest ev........... for CDS Exam Preparation

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Multiple Choice Questions

An automobile financer claims to be lending money at simple interest but he includes the interest ev...........

Quantitative Aptitude (CDS) Simple Interest
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    An automobile financer 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 at the rate of 10%, the effective rate of interest becomes

    10.25%

    Correct Answer

    10.5%
     

    Incorrect Answer

     10.75%

    Incorrect Answer

     11%

    Incorrect Answer
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    Explanation:

    Interest is to be calculated every month at the rate = 10 / 2 = 5 %

    = r1 + r2 + \frac{r1+r2}{100} = 5+5+\frac{5+5}{100} = 10.25\%

    By: Munesh Kumari
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