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

A person borrowed Rs 5,500 from a money lender at the rate of 24% per annum simple interest. He lent this amount to his friend at the rate of 36% per annum simple interest. After two years he collected the amount due to the money lender. The amount he thus earned is

  1. Rs 1,250

  2. Rs 1,300

  3. Rs 1,320

  4. Rs 1,350
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest earned = (36% - 24%) of 5500 for 2 years. 12% of 5500 = 660 per year. For 2 years, 660 * 2 = 1320.

Multiple choice

Out of a sum of Rs 3,200 a part was spent at 6% simple interest and the other at 9% simple interest. If the interest on the first part after 3 years is equal to the interest on the second part after 6 years, then what is the second part?

  1. Rs 600

  2. Rs 700

  3. Rs 800

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

Let the parts be x and 3200-x. Interest 1 = x * 0.06 * 3 = 0.18x. Interest 2 = (3200-x) * 0.09 * 6 = 0.54(3200-x). Setting 0.18x = 0.54(3200-x) leads to x = 3(3200-x), so x = 9600 - 3x, 4x = 9600, x = 2400. The second part is 3200 - 2400 = 800.

Multiple choice

A man borrows Rs. 8,000 at 10% compound interest payable every six months. He repays Rs. 2,500 at the end of every six months. Calculate the third payment he has to make at the end of 18 months in order to clear the entire loan.

  1. 3879.57

  2. 3879.75

  3. 3879.76

  4. 3879.89
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Principal = 8000, rate = 10% per annum, compounded half-yearly (5% per 6 months). Period 1: Interest = 8000 * 0.05 = 400. Balance = 8400 - 2500 = 5900. Period 2: Interest = 5900 * 0.05 = 295. Balance = 6195 - 2500 = 3695. Period 3: Interest = 3695 * 0.05 = 184.75. Final payment = 3695 + 184.75 = 3879.75.

Multiple choice

A man purchased a cow for $Rs. 3000$ and sold it the same day for $Rs. 3600$, allowing the buyer a credit of $2$ years. If the rate of interest be $10$% per annum, then the man has a gain of:
  1. $0$%
  2. $5$%
  3. $7.5$%
  4. $10$%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The man sells for 3600 but receives payment in 2 years. The present value of 3600 at 10% simple interest for 2 years is P = A / (1 + RT/100) = 3600 / (1 + 0.2) = 3600 / 1.2 = 3000. Since the cost price was 3000 and the present value of the sale is 3000, the gain is 0%.