Quantitative Aptitude · Commerce Accountancy

Interest and Annuities

621 Questions

Interest and annuities represent a critical quantitative aptitude section focusing on the mathematical calculation of simple interest, compound interest, and future values of investments. Questions challenge candidates to determine maturity values, compute recurring deposit returns, and calculate prevailing interest rates. Mastery of this topic is essential for scoring high in banking and SSC examinations.

Simple and compound interestFuture value of annuitiesRecurring deposit calculationsInterest rate determinationPresent value formulas

Interest and Annuities Questions

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

John had a Savings Bank Account in a bank. In the months of April, $'97$ and May, $'97$ he had the following entries in his passbook.
Find the amounts on which John will get interest for the months of April, $2011$ and May, $2011$. 

Date Particular Withdrawals (In Rs.) Deposits (In Rs.) Balance (In Rs.)
April $1$ By Balance $4,600.00$
April $7$ By Cash $1,200.00$ $5,800.00$
April $24$ To Cheque $800.00$ $5,000.00$
May $16$ By Cheque $2,000.00$ $7,000.00$
May $29$ To Cash $1,500.00$ $5,500.00$



  1. Rs. $5000$, Rs. $5500$
  2. Rs. $5000$, Rs. $2500$
  3. Rs. $2500$, Rs. $5000$
  4. Rs. $2500$, Rs.$ 2500$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to the entries in the passbook:

The minimum balance after $10^{th}$ April $2011$ and up to last of April $2011$ is Rs.$5000$.
$\therefore $ the amount on which John will earn interest for the month of April $2011=$ Rs.$5000$.
Similarly the minimum balance after $10^{th}$ May $2011$ and up to last of May $2011$ is Rs.$5500$
$\therefore $ the amount on which John will earn interest for the month of May $2011=$ Rs.$5500$.

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

Mrs. Kapoor opened a bank account on 01/01/2010 with Rs. 24,000. If the bank pays 10% per annum and she deposited Rs. 4,000 at the end of each year, find the amount in her account on 01/01/2012.

  1. 0

  2. Rs. 37,440

  3. Rs. 20,440

  4. Rs. 17,440
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal for the year 2010=Rs.24,000

Rate of interest=10%
$\therefore Interest=\frac{24000\times 1\times 10}{100}=Rs.2400$
Then the amount on Dec 2010=$Rs.24000+2400=Rs.26400$
At the end of the year Mrs.Kapoor deposited Rs.4000
$\therefore$ Amount at the end of the 2010$=26400+4000=Rs.30400$

Principal for the year 2011=Rs.30400
$\therefore interest=\frac{30400\times 1\times 10}{100}=Rs.3040$

Then the amount on Dec 2011=$Rs.30400+3040=Rs.33440$
At the end of the year Mrs.Kapoor deposited Rs.4000
$\therefore$ Amount at the end of the 2011$=33440+4000=Rs.37440$

$\therefore $Amount in her account on 01\01\2012=Rs.37440




Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

Calculate the interest for six months (January to June) at $4\%$ per annum on the minimum balance on or after the tenth day of each month.
The entries in a Saving Bank Passbook are as given below:

Date Particulars Withdrawals(In Rs.) Deposits(In Rs.) Balance(In Rs.)
$01.01.03$ B/F $14,000.00$
$01.02.03$ By Cash $11,500.00$ $25,500.00$
$12.02.03$ To Cheque $5,000$ $20,500.00$
$05.04.03$ By Cash $3,7500.00$ $24,500.00$
$15.04.03$ To Cheque $4,250.00$ $20,000.00$
$09.05.03$ By Cash $1,500$ $21,500.00$
$04.06.03$ By Cash $1,500$ $23,000.00$
  1. Rs. $2390$
  2. Rs. $2373$
  3. Rs. $2431.2$
  4. Rs. $2416.8$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to the passbook:

Principal for the month of January $=$ Rs.$14000.00$
Principal for the month of February $=$ Rs.$20,500.00$
Principal for the month of March $=$ Rs.$20500.00$
Principal for the month of April $=$ Rs.$20000.00$
Principal for the month of May $=$ Rs.$21500.00$
Principal for the month of June $=$ Rs.$23000.00$
Total Principal $=14000+20500+20500+20,000+21500+23000=$ Rs.$119500$
Rate of interest $=4\%$
Time $=6$ month $=$ $\dfrac{1}{2}$ years
$\therefore$ interest $=\dfrac{PRT}{100}$
$\Rightarrow \dfrac{119500\times 4\times 1}{2\times 100}$ $=$ Rs.$2390$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

In your saving bank account Rs. $1200$ for $3$ days at $2\%$ per annum is deposited. Calculate the interest.

  1. $0.197$
  2. $1.197$
  3. $2.197$
  4. $3.197$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Using the formula,
Saving account interest $=$ Principal or amount in the account $\times$ Number of days $\times$ Daily Interest Rate
At $2\% $daily interest rate $=$ $\dfrac{2%}{365}$
$=$ $\dfrac{1200\times3\times2}{100\times365}$
$= 0.197$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

In your saving bank account Rs. $100,000$ for $2$ days at $2\%$ per annum is deposited. Calculate the interest.

  1. $9.95$
  2. $10.95$
  3. $11.95$
  4. $12.95$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the formula,
Saving account interest $=$ Principal or amount in the account $\times$ Number of days $\times$ Daily Interest Rate
At $2\%$ daily interest rate $=$ $\dfrac{2%}{365}$
$=$ $\dfrac{100,000\times2\times2}{100\times365}$
$= 10.95$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths
Mr. Sen has a savings bank account with a Post Office. Calculate the interest canted by Mr. Sen during the year $2010$ at $6.5 \%$ per annum payable for the month of December if the entries during the year in his passbook are as given below:
Date Particulars Withdrwals (Rs.) Deposits(Rs.)
$2.1.10$ By Cash $250.00$
$9.1.10$ By Cheque $825.00$
$13.3.10$ To Cash $325.00$
$24.7.10$ By Cash $1,237.00$
$6.10.10$ To Cheque $250.00$
$22.12.10$ By Cheque $958.00$
  1. Rs. $78.35$
  2. Rs. $81.71$
  3. Rs. $72.58$
  4. Rs. $82.89$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In bank, the minimum balance From $10^{th}$ date to last day of month.

Then Product of month January, Ferbruay $= (250+825)\times 2=$ $1075\times2=2150$
Product of month march, April, may, June, July $=(1075-325)\times5=$ $750\times5=3750$ 
Product of month August, September $=(750+1237)\times 2=$ $1987\times2=3974$
Product of month October, November and December $=(1987-250)\times 3=$ $1737\times3=5211$ 
Then total product for year $2010=2150+3750+3974+5211=15085$.Rs
Then interest Payble at $6.5\%$ p.a for the month of December $=$ $\dfrac{15085\times 6.5}{100\times 12}=$ Rs. $81.71$  

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths
If the interest is calculated at $6\%$ p.a. and is compounded at the end of March and September every year, The interest earned up to $31^{st}$ March and then after completing all the entries, find the amount that the account holder would have received had he closed the account on $20^{th}$ Oct. the same year. A page from the passbook of a Saving Book account in a particular year is given below:
Date Particulars Debit (Rs.) Credit (Rs.) Balance (Rs.)
Jan. $13$ By Cash $5,000.00$ $5,000.00$
Feb. $13$ To self $500.00$
March $24$ By Cheque $2,000.00$
March $31$ By Interest
May $20$ By Cash $800.00$
July $7$ To Cheque $1,400.00$
July $18$ By Cash $1,600.00$
Sept. $15$ To Cheque $3,200.00$
Sept. $26$ By Cheque $2,350.00$
  1. Rs. $4517.86$
  2. Rs. $3890.1$
  3. Rs. $4329.39$
  4. Rs. $6898.10$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In bank gives interest on minimum balance between 10 Th to last date of month in S.B A\c

Date       Particulars          Debit(Rs)      Credit (Rs)     Balance (Rs )
Jan 13      By cash                                    5000.00       5000.00
Feb 13      To self                  500.00                             4500.00
March 24  By cheque                              2000.00        6500.00
March 31  By interest                                     45.00       6545.00
May 20     By cash                                        800.00      7345.00
July 7        To cheque         1400.00                               5945.00
July 18      BY cash                                        1600.00     7545.00
Sept 15     To cheque          3200.00                              4345.00
Sept 16     By cheque                                   2350.00     6695.00
Sept 30    By interest                                      203.10      6898.10
Oct 20      To A\C closed    6898.10                                  NIL  

Then product for the month Feb and March=$4500\times2=Rs 9000$
Then interest =$\dfrac{9000\times 6}{12\times 100}= 45$ Rs
Then product for month April and May=$6545\times 2=Rs 13090$
  Or product for the month June=Rs 7345
Product for the month July =Rs 5945
Product for the month August =Rs 7545
product for the month Sept=Rs 6695
Then total product up to month Sept=13090+7345+5945+7545+6695=40620 Rs
Then interest up to Sept =$\dfrac{40620\times 6}{12\times 100}= 203.10$Rs
The a|c closed on 20 Th Oct Then no interest paid for the month Oct
Then amount paid Rs. 6898.10.
    

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

How much interest will you earn if your saving bank account has Rs. $10,000,000$ for $20$ days at $3\%$ per annum is deposited.

  1. $1,043.83$
  2. $1,243.83$
  3. $1,643.83$
  4. $1,603.83$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using the formula,
Saving account interest $=$ Principal or amount in the account $\times$ Number of days $\times$ Daily Interest Rate
At $3\%$ daily interest rate $=$ $\dfrac{3%}{365}$
$=$ $\dfrac{10,000,000\times20\times3}{100\times365}$
$= 1,643.83$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

Mark invests Rs. $6500$ in a savings account his annual interest rate is $7\%$ compounded annually. What is the approximate balance of his savings account after $2\dfrac{1}{2}$?

  1. $6500$
  2. $5500$
  3. $7700$
  4. $8200$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

We know the formula,
$A = P\left (1+\dfrac{r}{n}\right)^{n.t}$
Where,
$A =$ total amount
$P =$ principal or amount of money deposited,
$r =$ annual interest rate
$n =$ number of times compounded per year
$t =$ time in years
Given: $P =$ Rs. $6500, r = 7\%, n = 1$ and $t =$ $2\dfrac{1}{2}$ years
$\Rightarrow A = 6500\left (1+\dfrac{0.07}{1}\right)^{1\times 2.5}$
$\Rightarrow A = 6500\times 1.07^{2.5}$
$\Rightarrow A = 6500\times 1.184294$
$\Rightarrow A =$ Rs. $7697.91$ $\text{approx}$ $7700$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

How much interest will you earn if your saving bank account has Rs. $30,000,000$ for $30$ days at $12\%$ per annum is deposited.

  1. $195,890.411$
  2. $295,890.411$
  3. $395,890.411$
  4. $495,890.411$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the formula,
Saving account interest $=$ Principal or amount in the account $\times$ Number of days $\times$ Daily Interest Rate
At $12\% $ daily interest rate $=$ $\dfrac{12%}{365}$
$=$ $\dfrac{30,000,000\times30\times12}{100\times365}$
$= 295,890.411$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

If you have a bank account whose principal is Rs. $5000$, and your bank compounds the interest twice a year at an interest rate of $12\%,$ how much money do you have in your account at the year's end?

  1. $4272$
  2. $5272$
  3. $6272$
  4. $7272$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Given: $P = 5000, r = 12\%, n = 2$ years
We know the formula $A = P\left [\left (1+\dfrac{r}{100}\right)^n\right]$
Substituting the given values int he formula, we get

$A = 5000\left [\left (1+\dfrac{12}{100}\right)^2\right]$
$A =$ Rs. $6272$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

Mari deposited Rs. $20000$ in a savings bank account. She would be paid interest at $12\%$ per annum compounded annually. Find the interest to her credit at the end of second year.

  1. $1088$
  2. $3088$
  3. $5088$
  4. $7088$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Given, $P = $ Rs. $20000$, $r = 12\%$, $n = 1$, $t = 2$ years
$A =$ $P\left (1+\dfrac{r}{n}\right)^{nt}$
$A =$ $20000\times (1+0.12)^{1\times 2}$
$A = 20000 \times  1.2544$
$A = Rs. 25088$
Amount $=$ Principal $+$ Interest
Interest $= A - P$
$= 25088 - 20000$
$=$ Rs. $5088$

Multiple choice banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account banking and taxation banking maths

What will a deposit of Rs. $4,500$ at $10\%$ in a savings account compounded yearly interest be worth if left in the bank for $9$ years?

  1. $2110.77$
  2. $4110.77$
  3. $6110.77$
  4. $8110.77$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Given, $P =$ Rs. $4500$, $r = 10\%$, $n = 1$, $t = 9$ years
$A =$ $P(1+0.1)^{1.9}$
$A = 4500 \times 2.357948$
$A =$ Rs. $10610.77$
Amount $=$ Principal $+$ Interest
Interest $= A - P$
$= 10610.77 - 4500$
$=$ Rs. $6110.77$

Multiple choice meaning and importance of taxes government and taxes tax civics economics

From the following information calculate interest coverage ratio: Profit after Tax Rs. 2,70,000; Tax Rs. 30,000; Interest on long term funds Rs.50,000

  1. 5 times

  2. 8 times

  3. 7 times

  4. 5.5 times
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest coverage ratio is given by =EBIT/Interest Expense

Therefore in this case EBIT= 270000+30000+50000=350000
Interest expenses= 50000
Interest coverage ratio will be 7 times

Multiple choice maths compound measures and motion kinetic graphs time - calcuation of distance travel graphs

A certain sum of money at simple interest amounts to $Rs. 1012$ in $2\dfrac {1}{2}$ years and to $Rs. 1067.20$ in $4$ years. The rate of interest per annum is

  1. $2.5$%
  2. $3$%
  3. $4$%
  4. $5$%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let the principal be $P$ and rate of interest be $r$%.
According to question,
$1012 = P + \dfrac {P\times r \times 5}{100\times 2} .... (1)$
Interest in $\dfrac {3}{2} years = 1067.20 - 1012 = Rs. 55.20$
$P = \dfrac {I\times 100}{R\times T} = \dfrac {55.20\times 100}{3} = \dfrac {3680}{r}$
Putting values in equation $(1)$,
$1012 = \dfrac {3680}{r} + \dfrac {3680\times r\times 5}{r\times 100\times 2}$
$1012 = \dfrac {3680}{r} + 92$
$\dfrac {3680}{r} = 1012 - 92 = 920$
$r = \dfrac {3680}{920} = 4$% per annum.
Hence, the rate of interest is $4$% per annum.