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Aptitude ➤ Simple Interest ➤ Set 1
1. Principal:The money borrowed or lent out for a certain period is called the principal or the sum.

2. Interest: Extra money paid for using other's money is called interest.

3. Simple Interest (S.I.) : If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called simple interest.

Let Principal = P, Rate = R % per annum (p.a.) and Time = T years. Then,

(i) S.I. = (P × R × T ) / 100

(ii) P = (100×S.I)/(R×T) ;
R = (100×S.I)/(P×T)
T = (100×S.I)/(P×R)
Question 11
Q11.  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:

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