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

In what time will Rs.$1000$ amount to Rs.$1331$ at $10$% p.a. compound interest?
  1. $4$ years
  2. $3$ years
  3. $2$ years
  4. $1$ year
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sum of roots of x^2 + ax + b = 0 is -a. Product is b. From first eq, roots 8, 2 give a = -10, b = 16. From second eq, roots 3, 3 give alpha = -6, b = 9. There is a contradiction in the value of b. Assuming the question implies finding roots for x^2 + ax + b = 0 using consistent values, the roots are 9 and 1.

Multiple choice

Anagha borrowed Rs.$ 70,000$ from her friend at the rate of $3.5\%$ p.a.compounded yearly. She returned the amount after three years. so calculate interest of first year and second year .
  1. $Rs.2,450,  85.75$
  2. $Rs.2,450,  2,450$
  3. $Rs.2,450,  2,535.75$
  4. $Rs.2,450,  2100$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest for the first year is 70000 * 0.035 = 2450. The amount after the first year is 72450. Interest for the second year is 72450 * 0.035 = 2535.75.

Multiple choice

A businessman borrowed the Rs.$45$ lakh for two years at the rate $2.5\%$ p.a. compounded annually. Calculate the compound interest by simple interest method.
  1. $2,23000$
  2. $2,27,812.5$
  3. $5,65,563$
  4. $2,00,000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest = P * R * T / 100 = 45,00,000 * 2.5 * 2 / 100 = 2,25,000. Compound interest = P * ((1 + R/100)^T - 1) = 45,00,000 * ((1.025)^2 - 1) = 45,00,000 * (1.050625 - 1) = 45,00,000 * 0.050625 = 2,27,812.5.

Multiple choice

A sum of money, invested at compound interest, amounts to Rs. $19,360 $ in $2$ years and to Rs. $23,425.60$ in $4$ yeas. Find the rate per cent and the original sum of money.
  1. $10$% and Rs. $17,000$
  2. $19$% and Rs. $25,637$
  3. $10$% and Rs. $16,000$
  4. $19$% and Rs. $26,634$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The amount after 2 years is P(1+r)^2 = 19360, and after 4 years is P(1+r)^4 = 23425.60. Dividing the two gives (1+r)^2 = 23425.60 / 19360 = 1.21. Thus, 1+r = 1.1, so r = 10%. P = 19360 / 1.21 = 16000.

Multiple choice

Naresh borrowed Rs. $5,00,000$ at $10$% p.a. compounded half-yearly. the interest he paid was approx $1,65,500$ find for how much time he borrowed this amount ?
  1. $2$ Years
  2. $2 \dfrac{1}{2}$ Years
  3. $3$ Years
  4. $3 \dfrac{1}{2}$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 500,000. Rate = 10% p.a. compounded half-yearly = 5% per half-year. Interest = 165,500. Amount = 665,500. A = P(1 + r/100)^n. 665500 = 500000(1.05)^n. 1.331 = (1.05)^n. Since 1.1^3 = 1.331 and 1.05^6 = 1.34, n=6 half-years = 3 years.

Multiple choice

Nandan borrowed Rs. $1,00,000$ at $20$% p.a. compounded half-yearly. The maximum interest he can pay was approx $30,000$ at any time find for how much time he can borrow this amount ?
  1. $1 \displaystyle \frac{2}{3}$ years
  2. $2 \displaystyle \frac{1}{2}$ years
  3. $1 \displaystyle \frac{1}{2}$ years
  4. $2$ years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 100000, Rate = 20% p.a. = 10% per half-year. Amount A = P(1 + r/100)^n. Interest = A - P = 100000((1.1)^n - 1) <= 30000. (1.1)^n <= 1.3. For n=1, 1.1. For n=2, 1.21. For n=3, 1.331. So n=2 half-years is 1 year, n=3 half-years is 1.5 years.