**SAMPLE PROBLEMS**

1. 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.

a. 10%

b. 10.25%

c. 10.5%

d. None of these

2. A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to Another person at 1/64% p.a for 2 years. Find his gain in the transaction per year.

a. Rs.112.50

b. Rs.125

c. Rs.225

d. Rs.167.50

3. Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit?

a. Rs.8600

b. Rs.8620

c. Rs.8820

d. None of these

4. Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is:

a. Rs.1550

b. Rs.1650

c. Rs.1750

d. Rs.2000

**Answers**— 1.B 2.A 3.C 4.C