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HVITQA_2002_2012_1118
3 1/2
INTEREST CALCULATION R R
Amount P 1 1
100 100
1. Principal:
The amount of money initially borrowed for a certain (v) Present worth of Rs.x due n years hence is,
period is called the principal or the sum.
x
n
2. Interest: Present worth R
1
Extra money paid for use of the principal after the certain 100
period is called the interest.
Application 1
3. Amount:
Find the simple interest on a principal of Rs.5000 at an interest
The sum of the principal and the interest after a certain rate of 6% p.a. for a period of 6 years.
period is called the amount.
Solution:
4. Rate of Interest: P = Rs.5000, R = 6% p.a., T = 6 years
The rate at which the interest is calculated is called the PRT 5000 6 6
rate of interest, which is always specified as a percentage. Simple interest Rs.1800
100 100
5. Simple Interest (S.I):
Application 2
If the interest on a sum borrowed for a certain period is
If Rs.5000 becomes Rs.5700 in a year’s time, what will Rs.7000
reckoned uniformly, it is called simple interest.
become at the end of 5 years at the same rate of interest?
If P is the principal, R% is the rate of interest per annum
Solution
and T the time in years,
Amount = Principal + Interest
PR T
S.I. Interest = Amount – Principal
100
= 5700 – 5000 = Rs.700
PRT
Amount P
100 PRT
I
100
6. Compound Interest:
5000 r 1 7000 70
If after specific intervals, the interest is also added to the 700 r 14%
100 500 5
principal for calculation of further interest, then the interest
The rate of interest = 14%
is called compound interest.
The specific interval may be annual, half yearly and The interest on Rs.7000 at 14% interest for 5 years
quarterly. 7000 14 5
Rs.4900
100
7. Formulae for compound interest:
Amount = 7000 + 4900 = Rs.11900
Let P be the principal, rate of interest r% per annum and
‘n’ the time in number of years. Application 3
(i) When the interest is compounded annually Find the compound interest on Rs.16,000 at 20% per annum for
Compound Interest = A – P where 9 months, compounded quarterly.
n Solution
r
A P1 Principal = Rs.16,000, Rate = 20% per annum = 5% per quarter
100
Time = 9 months = 3 quarters
(ii) When the interest is compounded half-yearly 3
5
2n Amount = 16000 1
r 100
Compound Interest = A – P where A P 1
200
3
21 21 21 21
16000 Rs.16000 = Rs.18522
(iii) When the interest compound quarterly, 20 20 20 20
4n
r Compound interest = Amount – Principal
Compound Interest = A – P, where A P 1
400 = 18522 – 16000 = Rs.2522
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
Solution 1
3. The half yearly interest rate will be of the annual rate
15 15 2
r r
P1 2P 1 2 … (i)
100 100 1
of interest and the quarterly interest rate will be of the
4
Let it become 8 times in n years.
annual rate of interest.
n n
r r
P 1 8P 1 8 … (ii) 4. While calculating compound interest, the principal should
100 100
be subtracted from the amount calculated.
From (i) and (ii)
3
r
n r
15 TWI QUESTIONS
1 100 8 1 100
n 45
r r
1 1
100 100
n 45 years
Application 5
If the difference between the compound interest and the simple 1. Ranjan deposited Rs.2000 in a bank. The bank pays 5%
interest on a certain sum of money is Rs.72 at 12% per annum interest per annum. What will be his annual income?
for 2 years, find the amount.
2. Shyam lent Rs.2100 at compound interest of 5% p.a. for 2
Solution
years to his friend. Find the amount after 2 years.
Let the amount be P.
P 12 2 24P 3. Find the rate of interest if the amount after 2 years of
Simple interest 0.24 P
100 100 simple interest on a capital of Rs.1200 is Rs.1440.
2
12 4. At what rate percent per annum simple interest will a sum
Compound interest P 1 P
100 of money double in 16 years?
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HVITQA_2002_2012_1118
10. The difference between compound interest and simple 1. Kaviya borrowed a sum of Rs.4800 from Anitha as a loan.
She promised Anitha that she would pay it back in two
interest on a certain sum of money at 10% p.a. for 3 years
equal instalments. If the rate of Interest be 5% per annum
is Rs.620. Find the principal if it is known that the interest
compounded annually, find the amount of each instalment
is compounded annually.
(a) Rs.2581.46 (b) Rs.4232.075
(a) Rs.200,000 (b) Rs.20,000 (c) Rs.2845.16 (d) Rs.4243.075
(c) Rs.10,000 (d) Rs.100,000
2. Equal sums of money are deposited in two different banks
11. Find the least number of complete years in which a sum of by M/s ABC Company, one at compound interest
money put out at 20% compound interest will be more (compounded annually) and the other at simple interest,
both at 15% per annum. If after two years, the difference
than doubled.
in the amounts comes to Rs.360, what is the amount
(a) 3 (b) 4 (c) 5 (d) 6 deposited with each bank?
(a) Rs.17200 (b) Rs.16400
12. Mr. Dhas invested money in 2 schemes A and B offering
compound interest at 8% per annum and 9% per annum (c) Rs.16000 (d) Rs.18400
respectively. If the total amount of interest accrued 3. Mr. X puts equal amount of money in two schemes: one at
through the two schemes together in 2 years was
10% per annum compound interest payable half yearly
Rs.4818,30 and the total amount invested was Rs.27,000.
and the second at a certain percent per annum compound
Find the amount invested in scheme A.
interest payable yearly. If he gets equal amounts after
(a) Rs.12,000 (b) Rs.13,500
3 yrs, what is the value of the interest percent in the
(c) Rs.15,000 (d) None of these second scheme?
(a) 10.25% (b) 15% (c) 22% (d) 21%
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QUANTITATIVE ABILITY
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4. A sum of Rs.5887 is divided between Prince and Fernando, 11. Effective annual rate of interest corresponding to nominal
such that Prince’s share at the end of 9 yrs is equal to rate of 6% per annum compounded half yearly will be
Fernando’s share at the end of 11 yrs both compounded (a) 6.09% (b) 6.10%
annually at the rate of 5%. The share of Prince is
(c) 6.12% (d) 6.14%
(a) Data inadequate (b) Rs.3087
(c) Rs.2000 (d) Rs.2088 12. Adam borrowed some money at the rate of 6% p.a. for the
first two years, at the rate of 9% p.a. for the next three
5. A sum of money is accumulating at compound interest at a years, and at the rate of 14% p.a. for the period beyond
certain rate. If simple interest instead of compound were
five years. If he pays a total interest of Rs.11,400 at the
reckoned, the interest for the first two years would be
end of nine years, how much money did he borrow ?
diminished by Rs.20 and that for the first three years by
(a) Rs.15000 (b) Rs.11000
Rs.61. Find the sum.
(c) Rs.12000 (d) Rs.18000
(a) Rs.7000 (b) Rs.47405
(c) Rs.45305 (d) Rs.8000 13. The compound interest on a sum for 2 years is Rs.832 and
the simple interest on the same sum for the same period
6. An amount of Rs.7500 is invested in a compound interest
is Rs.800. The difference between the compound and
scheme for 4 years. The rate of interest is 2% for the first
simple interest for 3 years will be
year, 3% for the next 2 years and for the last year, it is 4%.
The final amount approximately is (a) Rs.98.56 (b) Rs.99.86
(a) Rs.8356.7 (b) Rs.8557.45 (c) Rs.96.62 (d) Rs.97.77
(c) Rs.8440 (d) Rs.8635 14. Sally borrowed a sum of Rs.14000 at 9% rate of interest
7. A took a sum of Rs.4500 from B. He promised B that he per annum from Martha for a term of 2 years. After
would give back her money at the end of the year but she completion of one year, Sally repaid some amount and
gave an option to him that he could pay her in two equal finally at the end of two years Sally completed the debt by
annual instalments. A agreed on her suggestion. If the rate discharging a sum of Rs.11990. What amount did Sally
of interest on the sum was 10% per annum, compounded pay at the end of the first year?
annually, find the amount of the instalment given by A. (a) Rs.4560 (b) Rs.4260
(a) Rs.2390 (b) Rs.3429 (c) Rs.4460 (d) Rs.4360
(c) Rs.2560 (d) Rs.2592
15. What annual instalment will discharge a debt of Rs.6450
8. The simple interest accrued on an amount of Rs.27,500 at due in 4 years at 5% simple interest?
the end of three years is Rs.9900. What would be the (a) Rs.1000 (b) Rs.1200
difference between compound interest and simple (c) Rs.1450 (d) Rs.1500
interest on the same amount at the same rate in the same
period? 16. A sum of Rs.10 is given as a loan to be returned in
(a) Rs.11550 (b) Rs.1262.52 6 monthly instalments at Rs.3. What is the rate of interest?
(c) Rs.1235.52 (d) Rs.11135.52 (a) 500% (b) 620% (c) 640% (d) 580%
9. Shawn invested one half of his savings in a bond that paid 17. Rs.7500 is to be paid in 3 years at 5% C.I in equal annual
simple interest for 2 years and received $ 550 as interest. instalments. Find the value of the instalment?
He invested the remaining in a bond that paid compound (a) Rs.2754 (b) Rs.2457
interest, interest being compounded annually, for the (c) Rs.2547 (d) Rs.2745
same 2 years at the same rate of interest and received
18. Interest on a sum of money at the end of 3 years is 3/8th of
$605 as interest. What was the value of his total savings
the sum itself. Find the rate of interest.
before investing in these two bonds?
(a) 11.5% (b) 12.2% (c) 12.5% (d) 13.5%
(a) $5500 (b) $7750 (c) $3550 (d) $2750
19. Arun borrowed a certain sum from Manish at a certain
10. Raj borrowed Rs.7000 from a bank at 5% simple annual
rate of simple interest for 2 years. He lent this sum to
rate of interest. The amount is to be paid after five years.
Sunil at the same rate of interest compounded annually
Raj paid Rs.4000 after two years. How much amount
for the same period. At the end of two years, he received
should he pay at the end of 5 years to pay off his debt
Rs.2400 as compound interest but paid Rs.2000 only as
completely?
simple interest. Find the rate of interest.
(a) Rs.4050 (b) Rs.4100
(a) 40% (b) 30% (c) 10% (d) 20%
(c) Rs.4150 (d) Rs.4200
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
20. Divide Rs.3364 between A and B, so that A's share at the PROBLEMS ON MIXTURES AND SOLUTIONS FALL UNDER
end of 5 years may equal to B's share at the end of 7 years, FIVE DIFFERENT CATEGORIES:
the compound interest being at 5 percent.
Type 1
(a) Rs.1764, Rs.1600 (b) Rs.1756, Rs.1608
(c) Rs.1722, Rs.1642 (d) None of these Given: Two similar mixtures or solutions containing the same
two constituents in two different ratios.
MIXTURES & ALLIGATIONS To Find: Ratio in which these two mixtures are to be mixed to
obtain a desired ratio of the two constituents in the resultant
Mixture is a material system made up of two or more different
mixture.
substances which are mixed but are not combined chemically. A
mixture refers to the physical combination of two or more Example
substances in which the identities are retained.
In what ratio should a coffee blend containing coffee and chicory
A Solution is basically two substances that are evenly mixed in the ratio 3:7 and another blend with coffee to chicory ratio as
together. One of them is called the solute and the other is the 2:3 be mixed so that the resultant blend will have a coffee to
solvent. A solute is the substance to be dissolved (sugar). The chicory ratio of 7:13?
solvent is the one doing the dissolving (water). Both the Solution
substances may be of liquid form.
Let x and y be the quantities of the first and the second blends
ALLIGATION respectively to be mixed. Then in the resultant blend, the
It is the rule that enables us to find the ratio in which 3 2
quantity of coffee x y
two or more ingredients at the given prices must be 10 5
mixed to produce a mixture of desired price.
7 3
• MEAN PRICE and the quantity of chicory x y.
10 5
The cost of a unit quantity of the mixture is called the
By the given condition,
mean price.
3 2 7 3
• RULE OF ALLIGATION x y : x y 7 :13 or
10 5 10 5
When two or more quantities of different products are
mixed together to produce a mixture of a mean value, 3 2
x y
the ratios of their amounts are inversely proportional to 10 5 7
or
the difference of their values from the mean value. 7 3 13
x y
If two ingredients are mixed, then 10 5
y x x : y 1 :1
Aliter:
The ratio in which the quantity of the cheaper is mixed with the
quantity of the dearer to obtain the mean value is given as:
To be known: Type 2:
1. Choose any one constituent of the mixture or solution. Given: Quantity of one mixture or solution with the ratio of the
(There is no rule in selection) constituents.
2. Check out the proportion or percentage or amount of the To find: The quantity of similar mixture or solution of same
chosen constituent in the two mixtures or solutions constituents to be added to obtain a desired ratio of constituents
available and also in the resultant mixture. in the resultant mixture.
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
Example Solution
Let the quantity of fresh water to be added be x kg.
A container has 60 liters of 40% alcohol solution. How many
liters of a 50% alcohol solution should be added to this solution Quantity of salt in 40 kg of sea water 40 0.05 2kg
so that the resultant solution will have 42% alcohol? Total quantity of the solution after adding water 40 x .
(a) 2:3 (b) 5:1 (c) 4:1 (d) 3:4
Percentage of salt in the resultant solution
Ans: (c)
2/ 40 x 100 2(given)
Solution
Let the quantity of 50% alcohol to be added be x litres. 40 x 100 or x 60.
Quantity of alcohol in 60 litres of 40% solution So, 60 kg of fresh water should be added.
60 0.4 24 litres
Aliter:
Quantity of alcohol in x litres of 50% solution x0.5 0.5x.
40 kg
Quantity of alcohol in (60 + x) litres of the resultant solution Sea water 5% Fresh water 0%
24 0.5x.
Percentage of alcohol in (60 + x) litres of resultant solution
2%
24 0.5x / 60 x 100.
So, 15 litres of 50% alcohol are to be added. 60 kg of fresh water must be added.
Aliter: Type 4:
Given: The quantity of one mixture or solution of two
constituents in a particular ratio.
To Find: The ratio of the two constituents in the resultant
mixture or solution when certain quantity is removed and
replaced with one of the constituents.
Example
A vessel is filled with a liquid, 3 parts of which are water and 4 parts
milk. How much of the mixture must be drawn off and replaced
Therefore, 15litres of 50% alcohol solution are to be added.
with water so that the mixture may be half water and half milk?
Type 3:
1 1 1 1
(a) (b) (c) (d)
Given: Quantity of one mixture or solution of two constituents 7 4 8 6
in a particular ratio. Ans: (c)
Solution
To find: The quantity of either of the constituents to be added to
obtain a desired ratio of the two constituents in the resultant Suppose the vessel initially contains 7 litres of liquid.
mixture or solution. Let x litres of this liquid be drawn off and replaced with water.
3x
Example Quantity of water in the new mixture 3 x litres
7
Sea water contains 5% salt by weight .How many kilograms of
4x
fresh water must be added to 40 kg of sea water for the salt Quantity of milk in the new mixture 4 litres
7
content of the solution to be 2%?
Ratio of water to milk in the resulting mixture =1:1
(a) 50 (b) 60 (c)65 (d) 70
3x 4x
Ans: (b) 3 x 4
7 7
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
1 Ans: (c)
xx 1
7 Solution
8 Cost of 1 kg pulses of variety 1 = Rs.15
x 1.
7 Let the quantity of variety 1 be x kg.
8 8
Concentration after second sale 100 1 1
80 80
8 2
100 1 60
80 Quantity sold at 18% profit 1000 600 kg
10
2
100 0.9 = 81% Application 3
Hence, the third customer gets 81% of pure milk or In what ratio must a grocer mix two varieties of tea worth Rs.60
80.81 6.48 liters of pure milk. a kg and Rs.65 a kg so that by selling the mixture at Rs.68.20 a
Application 1 kg, he may gain 10%?
(a) 3:2 (b) 3:4 (c) 3:5 (d) 3:7
In what ratio must a grocer mix two varieties of pulses costing
Ans: (a)
Rs.15 and Rs.20 per kg respectively so as to get a mixture worth
Rs.16.50 kg? Solution
(a) 2:3 (b)5:1 (c) 7:3 (d) 3:4 Selling price of the mixture per kg = Rs.68.20
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
Aliter: Four litres of 100% pure sulphuric acid is added to six litres of 20%
sulphuric acid. What is the strength of the acid in the new mixture?
(a) 48% (b) 42% (c) 52% (d)51%
Ans: (c)
Solution
Let the strength of the acid in the new mixture be x%.
Applying the principle of alligation,
Therefore, the required ratio = 3:2.
Application 4
A container contains 40 litres of milk. From this container, 4 The contents of the two containers should be mixed in the ratio 2:3.
litres of milk were taken out and replaced with water. This Application 8
process was repeated further two times. How much milk is now
contained by the container? Two alloys contain zinc and copper in the ratio of 2:1 and 4:1
(a) 26.34 litres (b) 27.36 litres respectively. In what ratio the two alloys should be melted to get
a new alloy having zinc and copper in the ratio 3:1?
(c) 28 litres (d) 29.16 litres
(a) 3:5 (b) 3:7 (c) 4:7 (d) 7:5
Ans: (d)
Ans: (a)
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QUANTITATIVE ABILITY
HVITQA_2002_2012_1118
Solution 7
Initial Concentration of liquid A
Let the two alloys be mixed in the ratio x:y. 12
2 4 7
Quantity of zinc in the new alloy x y Final Concentration of liquid A
3 5 16
Percentage of zinc Applying the formula,
2 4
x y Final Concentration(FC)
3 5 100 10x 12y 100 … (1) Initial Concentration(IC)
xy 15 x y
Ratio of zinc and copper in the new alloy = 3:1 Initial Volume Volume of mixture taken out and replaced
Initial Volume
3
Percentage of zinc in the new alloy 100 … (2)
31 7
16 a 9 12 a 9
From (1) and (2), a 36 litres
7 a 16 a
10x 12y 3 12
x : y 3:5
15 x y 4
7
liquid A in the vessel 36 21 litres
Application 9 12
In what ratio must a person mix three kinds of solution costing GUARD AGAINST POPULAR ERRORS
Rs.12, Rs.14.40 and Rs.17.40 per kilogram so that the mixture • Mixing 80% milk solution and 90% milk solution does
may be worth Rs.14.10 per kilogram? not always result in a 85% milk solution - this is possible
(a) 11:77:7 (b) 11:17:7 (c) 11:7:77 (d) 13:11:77 only if equal quantities are mixed.
Ans: (a)
• In 20 litres of milk solution, milk and water are in the
Solution ratio 3:2. When 10 litres of water added to the solution,
Let the ratio in which the three kinds of solution are to be mixed the ratio becomes 2:3, but not at 3:2.
be x:y:z. Applying first the principle of alligation to the 1st and
• In 10 litres of mango juice, milk and mango are in the
2nd kinds and then to the 1st and 3rd kinds, we get
ratio 1:2. Then every drop of the 10 litres will bear the
same ratio.
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