Simple and Compound Interest Questions

Multiple choice
  1. Rs. $1815$
  2. Rs. $1825$
  3. Rs. $1845$
  4. Rs. $1875$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The compound interest for the third year is simply the simple interest on the accumulated amount at the end of the second year. The amount after two years is 15000 * (1 + 0.10)^2 = 18150. Taking 10% of this amount gives the interest for the third year, which is 1815.

Multiple choice
  1. $7184$
  2. $7284$
  3. $7384$
  4. $7484$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Investment = 21000 / 3 = 7000. Rate = 4% per annum, compounded quarterly = 1% per quarter. Time = 1 year = 4 quarters. Amount = 7000 * (1 + 0.01)^4 = 7000 * (1.01)^4 = 7000 * 1.04060401 = 7284.228. Savings = 7284.