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 borrows Rs.$800$ at the rate of $12\%\,p.a.$ simple interest and $B$ borrows Rs. $910$ at the rate of $10\%\,p.a.$ simple interest. In how many years will their amounts of debts be equal?
  1. $\;18$ years
  2. $\;20$ years
  3. $\;22$ years
  4. $\;24$ years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let t be the time in years. The amount for A is 800 + (800 * 0.12 * t) and for B is 910 + (910 * 0.10 * t). Setting these equal, 800 + 96t = 910 + 91t, which simplifies to 5t = 110, so t = 22 years.

Multiple choice

A lent Rs. $600$ to $B$ and some amount to $C$ at the rate of $8\displaystyle\frac{1}{3}\%$ p.a. simple interest. After $5$ years he got the total interest of Rs. $400$ from $B$ and $C$ together. The amount of moey lent by $A$ to $C$ was
  1. Rs. $300$
  2. Rs. $360$
  3. Rs. $400$
  4. Rs. $420$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Rate = 25/3 percent. Interest from B = (600 * 25/3 * 5) / 100 = 250. Total interest is 400, so interest from C = 400 - 250 = 150. Principal for C = (150 * 100) / (25/3 * 5) = 15000 / (125/3) = 15000 * 3 / 125 = 360.

Multiple choice

Simple interest on a certain amount is $\displaystyle\frac{9}{16}$ of the principal. If the number representing the rate of interest in percent and time in years be equal, then the time for which the principal amount is lent out is
  1. $\;5\displaystyle\frac{1}{2}$ years
  2. $\;6\displaystyle\frac{1}{2}$ years
  3. $\;7$ years
  4. $\;7\displaystyle\frac{1}{2}$ years
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

SI = (P * R * T) / 100. Given SI = (9/16)P and R = T. (9/16)P = (P * R * R) / 100. R^2 = 900 / 16. R = 30 / 4 = 7.5. Since R = T, time = 7.5 years.

Multiple choice

Rs. $\,1500$ is invested at a rate of $10\%$ simple interest and interest is added to the principal after every $5$ years. In how many years will it amount to Rs. $\,2500$?
  1. $\;6\displaystyle\frac{1}{9}$ years
  2. $\;6\displaystyle\frac{1}{4}$ years
  3. $\;7$ years
  4. $6$ years
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For the first 5 years, interest is 1500 * 0.1 * 5 = 750. Total amount after 5 years is 1500 + 750 = 2250. We need 250 more. The new principal is 2250. Interest needed = 250. Time = 250 / (2250 * 0.1) = 250 / 225 = 10/9 years. Total time = 5 + 10/9 = 6 1/9 years.

Multiple choice

A man borrowed $Rs.\,1000$ to build a house. He pays $5\%\,p.a$ simple interest. He lets the house and receives a rent of $Rs.\,12.50$ per month. In how many years he is expected to clear the debt?
  1. $\;7$
  2. $\;15$
  3. $\;10$
  4. $\;8$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Annual rent = 12.50 * 12 = 150. Interest per year = 1000 * 0.05 = 50. The man uses the rent to pay interest and reduce principal. However, the question implies clearing the debt. If he pays 50 interest annually, he has 100 left to pay principal. 1000 / 100 = 10 years.