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How to Solve Simple Interest Problems for NID 2025

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Author : Aparna

August 4, 2024

Overview: 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 2025 entrance exam to familiarize you with the questions that may be asked in the exam.

Mastering simple interests is crucial for cracking the NID exam.

This guide will equip you with the essential formulas and problem-solving techniques. Let's dive in!

Simple Interest in Simple Terms

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.

How to Solve Simple Interest Problems for NID 2025

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

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 interest; 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 entrance exam.

Tricks to Solve Simple Interest Questions for NID 2025

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 interest rate annually, and the Rate of Interest will be denoted as capital 'R'.
When you lend money, you will get the Time to return or return that money with Interest. That period is considered a time is denoted as 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.

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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 principal interest 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.

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Sample Simple Interest Problems for NID 2025

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 Rate of interest on which Sagar borrowed money,
Sagar had borrowed Rs. 50,000, and he had to pay Rs. 66,000 after five years
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 find at what Rate of Interest per annum he is paying the claim to the total simple Interest for five years is Rs. 16,000
So the simple Interest for one year will be 16000/5 = 3,200
Rate of interests = simple Interest is what percentage of the interest per year is mentioned below:
Simple Interest = Rs. 3,200 for one year
Principal Amount =Interest000
Rate of interest = simple interest of 1 year/principal amount Interest
Rate of interest = 3200 / 50000 x 100
Rate of interest = 6.4 %

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 better by solving another example-

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Check: Important questions with answers for the NID CAT exam

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 investment will be doubled.

Explanation:

To give: Rate of simple Interest 15%

To find: At what time the principal amount 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

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.

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 will calculate the Time, in 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 questions 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 learn various tricks and methods to solve simple interest questions efficiently. Practice these techniques to strengthen your preparation.

Check: Important questions for the NID CAT exam

Question 1: Find the simple Interest on Rs. 7,200 at 8% per annum for ten months; Interest 0

Rs. 420
Rs. 450
Rs. 410
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: simple interest?
Solution: here principal = Rs. 7,200
Rate of Interest = 8% per annum
Time = 10/12 years = ⅚ years 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.

Therefore, the simple Interest is Rs. 480.

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

Rs. 310
Rs. 320
Rs. 330
Rs. 340
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

Check: NID GAT Important Questions PDF

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

Rs. 5,175
Rs. 4,425
Rs. 5,425
Rs. 4,175
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

Check: 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.

Rs. 9,630
Rs. 9.140
Rs. 9,750
Rs. 9,810
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

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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.

7%
8%
6%
9%
None

Answer: (d) 9%

Explanation:

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 year = Amount 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
Smole interest = 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.

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

8%
9%
8 ½ %
9 ½ %
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. 1 Simple 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 = (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%

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Question 7: At what time the amount double itself at 8% per annum simple Interest?

12 year
Ten year
12 ½ year
10 ½ year
None of these

Answer: (c) 12 ½ year

Explanation:

To give: The Rate of simple Interest is 8%

To find: At what time the principal amount 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

So, in this case

The Rate of Interest is 8 % which is 2 / 25.
So this means that 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 will calculate 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.

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.

Check: NID Exam Admission 2025

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

12 ½ %
12%
10 ½ %
10%
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
⇒ Simple Interest = 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. 12 Interest 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.

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

One year
Five year
Four year
Two year
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 time is two years.

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

8 ⅓ year
8 ½ year
8 ¼ year
Eight year
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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In conclusion, this article effectively equips NID 2025 aspirants with the essential methods and strategies for mastering simple interest problems. It provides a clear explanation of the fundamental concepts, a step-by-step approach to solving problems, and practical examples to enhance understanding.

With the resources and tips offered, candidates can approach their exam preparation with greater confidence and precision.

Key Takeaways

Simple interest questions can be presented in various ways.
Practice solving different types of problems to improve your skills.
Learn time-saving methods to solve problems efficiently.
Review incorrect answers to identify areas for improvement.

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