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

Vikram needs to convert his purchases into monthly installments. The company uses a model where the interest is compounded annually and it increases with the years. For the first year, it is 20% and then, it doubles each subsequent year. If he has made purchases worth Rs. 1,50,000, then what amount will he have to pay in 2 years?

  1. Rs. 2,52,000

  2. Rs. 2,54,000

  3. Rs. 2,56,000

  4. Rs. 2,58,000

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

Year 1 interest is 20%. Year 2 interest doubles to 40%. Amount after 2 years = 150,000 * (1 + 0.20) * (1 + 0.40) = 150,000 * 1.2 * 1.4 = 150,000 * 1.68 = 252,000.

Multiple choice

Adam borrowed some money at the rate of 6% per annum for the first two years, at the rate of 9% per annum for the next three years, and at the rate of 14% per annum for the period beyond five years. If he pays a total interest of Rs. 11400 at the end of nine years, how much money did he borrow?

  1. 10000

  2. 11000

  3. 12000

  4. 13000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The total interest percentage over the 9 years is (6% * 2) + (9% * 3) + (14% * 4) = 12% + 27% + 56% = 95% of the principal. Since the total interest paid is Rs. 11400, we have 0.95 * P = 11400, which gives P = 12000.

Multiple choice

Two separate investments of \$1,750 each are made for 2 years at simple interest in two different schemes. The difference between the simple interests earned is \$12.25. What is the difference between their annual rates of interest?

  1. 0.7%

  2. 0.8%

  3. 0.03%

  4. 0.35%

  5. 0.32%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest is given by I = (P*R*T)/100. The difference in interest between two schemes with rates R1 and R2 is 12.25 = (1750 * (R1 - R2) * 2) / 100. Solving for (R1 - R2) gives 12.25 / 35 = 0.35%.