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

Mr. X invested a sum at compound interest payable half yearly in May and November. If the compound interest in November, 2003 was Rs. 225 and in May, 2004 was Rs. 236.25, find the annual rate of interest.

  1. 7%

  2. 8%

  3. 9%

  4. 10%

  5. 12%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

With half-yearly compounding, the interest for the second period is the interest of the first period plus the interest on that interest. 236.25 - 225 = 11.25. The rate r satisfies 225 * (r/200) = 11.25, so r/200 = 0.05, meaning r = 10%.

Multiple choice

Mohit invested an amount of Rs. 18,000 at the rate of 6% simple interest and another amount at the rate of 10% simple interest. The total interest earned at the end of one year on the amount invested becomes 7% p.a. Find the total amount invested.

  1. Rs. 20,000

  2. Rs. 22,000

  3. Rs. 24,000

  4. Rs. 25,000

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let the second amount be x. Total interest = 0.06(18000) + 0.10(x) = 0.07(18000 + x). 1080 + 0.1x = 1260 + 0.07x. 0.03x = 180, so x = 6000. Total investment = 18000 + 6000 = 24000.

Multiple choice

A principal amount of Rs. 900 becomes Rs. 1200 in 4 years at a certain rate of simple interest. If the rate of interest is increased by 5%, then what will be the amount in 3 years?

  1. Rs. 1060

  2. Rs. 1160

  3. Rs. 1260

  4. Rs. 1350

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest = 1200 - 900 = 300. Time = 4 years. Rate = (300 * 100) / (900 * 4) = 30000 / 3600 = 8.33%. New rate = 8.33 + 5 = 13.33%. New interest for 3 years = (900 * 13.33 * 3) / 100 = 360. New amount = 900 + 360 = 1260.

Multiple choice

Amit lent Rs. 40,000 each to 2 persons, one at 30% simple interest and second at 30% compound interest for 3 years. By what percentage is the compound interest greater than the simple interest received by Amit in 3 years?

  1. 23%

  2. 33%

  3. 35.33%

  4. 37.53%

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple Interest (SI) = P * R * T / 100 = 40000 * 0.3 * 3 = 36000. Compound Interest (CI) = P * ((1 + R/100)^T - 1) = 40000 * ((1.3)^3 - 1) = 40000 * (2.197 - 1) = 40000 * 1.197 = 47880. Difference = 47880 - 36000 = 11880. Percentage = (11880 / 36000) * 100 = 33%.

Multiple choice

Ramesh invested 2,500 each in two investment schemes, viz., Compound Interest Scheme, interest being compounded annually and Simple Interest Scheme at same rate of interest. If the difference between the CI and SI is 100 after 2 years, what is the rate of interest per annum?

  1. 20%

  2. 18%

  3. 10%

  4. 5%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Difference between CI and SI for 2 years = P * (r/100)^2. 100 = 2500 * (r/100)^2. 100/2500 = (r/100)^2. 1/25 = (r/100)^2. 1/5 = r/100. r = 20%.

Multiple choice

What is the approximate difference between simple interest and compound interest, interest being compounded half yearly, for a period of one year on a sum of 8,000 at 12% per annum?

  1. Rs 24

  2. Rs 7

  3. Rs 29

  4. Rs 0
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 8000, Rate = 12% p.a. Simple interest for 1 year = 8000 * 0.12 = 960. Compound interest (half-yearly) = 8000 * (1 + 0.06)^2 - 8000 = 8000 * (1.1236 - 1) = 8000 * 0.1236 = 988.8. Difference = 988.8 - 960 = 28.8, which is approximately 29.