Quantitative Aptitude

Simple and Compound Interest

3,394 Questions
All Simple interest and its inverse forms 768 Compound interest with annual compounding 742 Simple-interest growth and split sums 626 Difference between compound and simple interest 479 Half-yearly and quarterly compounding 252 Changing rates and fractional years 201 Installments (CI based) 190 Ratio of principal to interest 118 Population growth and depreciation 16

Simple and Compound Interest Questions

Multiple choice

Find the monthly payment of a person who secures a loan of $ $4,000$ which he will pay back in $36$ months with a monthly interest rate of $0.01$ such that $M = \dfrac {rP}{1 - \left (\dfrac {1}{1 + r}\right )^{t}}$ where $M$ is the monthly payment, $r$ is the monthly decimal interest rate, $P$ is the amount borrowed and $t$ is the number of months it will take to repay the loan.
  1. $ $111.11$
  2. $ $119.32$
  3. $ $132.86$
  4. $ $147.16$
  5. $ $175.89$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Using the formula M = (0.01 * 4000) / (1 - (1 / 1.01)^36). 1.01^36 is approx 1.430768. (1/1.01)^36 is approx 0.6989. Denominator = 1 - 0.6989 = 0.3011. M = 40 / 0.3011 = 132.846.

Multiple choice

A sum is invested for three years at compound interest. The rates of compound interest for the first, second and third years are $8 \% $, $10 \%$ and $20 \%$ respectively. If the sum amounts to Rs$14,256$ at the end of three years, find the sum.
  1. Rs$10,000$
  2. $9,000$
  3. $8,000$
  4. $12,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let the sum be P. The amount after 3 years is P * (1 + 8/100) * (1 + 10/100) * (1 + 20/100) = 14256. This is P * (1.08) * (1.1) * (1.2) = 14256. P * 1.4256 = 14256, so P = 10000.

Multiple choice

Kamal and Anand each lent the same sum of money for 2 years at 5% at simple interest and compound interest respectively. Anand received Rs. 15 more than Kamal. Find the amount of money lent by each and the interest received.

  1. Rs. 6,000; Kamal = Rs. 600 and Anand = Rs. 615

  2. Rs. 8,000; Kamal = Rs. 600 and Anand = Rs. 615

  3. Rs. 6,000; Kamal = Rs. 800 and Anand = Rs. 615

  4. Rs. 6,000; Kamal = Rs. 600 and Anand = Rs. 610
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Difference between CI and SI for 2 years = P * (r/100)^2. 15 = P * (5/100)^2 = P * (1/400). P = 6000. SI = 6000 * 0.05 * 2 = 600. CI = 6000 * (1.05^2 - 1) = 615.

Multiple choice

A principal sum of money is lent out at compound interest compounded annually at the rate of 20% per annum for 2 years . It would give Rs 2410 more if the interest is compounded half year. Find the principal sum.

  1. Rs 120000

  2. Rs 125000

  3. Rs 100000

  4. Rs 110000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For annual compounding, Amount = P(1 + 0.20)^2 = 1.44P. For half-yearly compounding, rate is 10% and time is 4 periods, so Amount = P(1 + 0.10)^4 = 1.4641P. The difference is 0.0241P = 2410, which gives P = 100000.

Multiple choice

A bank offers $5\%\ C.I.$ calculated on a half-yearly basis. A customer deposits $Rs.\ 1600$ each on 1st January and $1st$ July of a year. At the end of the year, the amount he would have gained by way of interest is
  1. $Rs.\ 120$
  2. $Rs.\ 121$
  3. $Rs.\ 122$
  4. $Rs.\ 123$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Half-yearly rate = 2.5%. First 1600 earns interest for 1 year (2 periods): 1600 * (1.025)^2 - 1600 = 1600 * 1.050625 - 1600 = 81. Second 1600 earns interest for 6 months (1 period): 1600 * 0.025 = 40. Total interest = 81 + 40 = 121.