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

What will be the difference between the simple interest and compound interest compounded annually at the rate of 12% per annum on Rs. 5000 for two years?

  1. Rs. 47.50

  2. Rs. 72

  3. Rs. 70

  4. Rs. 128

  5. Rs. 63
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest (C.I.)=Amount-Principal Simple interest(S.I.)=Principal*Time*Rate%/100. Required difference is (5000(1+(12/100)2-5000)-(5000*12*2/100) =5000((28/25)*(28/25) -1)-1200 =5000((784-625)/625)-1200 = Rs. 72
It is the correct answer.

Multiple choice

There is a 60% increase in the amount in 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?

  1. Rs. 2160

  2. Rs. 3120

  3. Rs. 3972

  4. Rs. 6240

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let the principal = Rs. x Then, the amount = 160x/100 Therefore, interest = 160x/100 - x = 60x/100 So, the rate of interest = (SI x 100)/(P x T) = (60x/100) * 100/(x * 6) = 10% Now, we will find the amount of compound interest, which is A = P(1 + R/100)n A = Rs. 12,000(1 + 10/100)3 A = Rs. 15,972 CI = A - P = Rs. (15,972 - 12,000) = Rs. 3972

Multiple choice

The compound interest on a certain sum of money for 2 years at 10% per annum is Rs. 420. Find the simple interest at the same rate and for the same time.

  1. Rs. 400

  2. Rs. 500

  3. Rs. 450

  4. Rs. 550

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let P = Rs. x, T = 2 years, R = 10% p.a, and CI = Rs. 420.
Then, A = P(1 + R/100)n A = x(1 + 10/100)2 A = x(11/10)2 A = 121x/100 Because CI = A - P 420 = 121x/100 - x x = 2000 Now, SI = (P * R * T)/100 = (2000 * 10 * 2/100) = Rs. 400 Therefore, the required interest is Rs. 400.

Multiple choice

When does an unborn person acquire vested interest on transfer?

  1. As soon as he is born

  2. On attaining majority

  3. On attaining 21 years

  4. After marriage, if female
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Under Section 20 of Transfer of property Act, 1882, where on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appears from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

 

Multiple choice

In simple interest what sum amounts of Rs.1120/- in 4 years and Rs.1200/- in 5 years?

  1. Rs. 500

  2. Rs. 600

  3. Rs. 800

  4. Rs. 900
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let principal be P and rate be r% per annum. Amount after 4 years = P + (P×r×4)/100 = 1120. Amount after 5 years = P + (P×r×5)/100 = 1200. Subtracting: (P×r)/100 = 80, which is the simple interest for 1 year. Substituting back: P + 320 = 1120, so P = 800. Therefore, Rs. 800 amounts to Rs. 1120 in 4 years and Rs. 1200 in 5 years at simple interest.

Multiple choice

Animesh borrowed Rs. 900 at 4% p.a. and Rs. 1100 at 5% p.a. for the same duration. If he had to pay Rs. 364 in total as the interest, what is the time period that he borrowed the sum for (in years)?

  1. 6

  2. 4

  3. 8

  4. 5

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let us assume that the tenure is n years. As the calculation is as per simple interest: Total interest = 900 * 4 * n/100 + 1100 * 5* n/100, i.e. 91n => 91 n = 364 (as per given data) So, n = 4 years, i.e. the tenure is 4 years. So, option 2 is correct.

Multiple choice

The difference between simple interest (SI) and compounded interest (CI) on a certain sum at 10% per annum for 3 years is Rs. 620. Find the principal if the interest is compounded annually.

  1. 28,000

  2. 25,000

  3. 21,000

  4. 24,000

  5. 20,000
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Assume that the sum is X; As per SI /simple interest - interest = 3X/10 = 0.3X As per CI/compound interest - interest = X{ - 1} = 0.331X As per the given data, 0.331X - 0.3X = 620 => X = 20,000

So, option 5 is correct.