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

Sahil borrowed Rs. 19,500 at 20% compound interest for a period of 3 years. He pays Rs. 1500 as instalment at the end of every year. How much money does he still owe after 3 such instalments?

  1. Rs. 28,236

  2. Rs. 31,596

  3. Rs. 27,996

  4. Rs. 42,396

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

Year 1: Amount = 19500 * 1.2 - 1500 = 21900. Year 2: Amount = 21900 * 1.2 - 1500 = 24780 - 1500 = 24780. Year 3: Amount = 24780 * 1.2 - 1500 = 29736 - 1500 = 28236.

Multiple choice

If Rs. 11,498 divided into two parts, A and B, such that the first part after 11 years is equal to the second part B after 13 years, compound interest being 14% per annum compounded yearly, then what is the value of A and B, respectively?

  1. Rs. 6,598; Rs. 5,000

  2. Rs. 6,235; Rs. 5,300

  3. Rs. 6,498; Rs. 5,000

  4. Rs. 5,498; Rs. 6,000

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

A * (1.14)^11 = B * (1.14)^13. This implies A = B * (1.14)^2 = B * 1.2996. A + B = 11498. Substituting A: 1.2996B + B = 11498, so 2.2996B = 11498, B = 5000. Then A = 11498 - 5000 = 6498.

Multiple choice

A sum of Rs 1085 is lent out in two parts on Simple interest in such a way that the interest on one part at 9% for 3 years is equal to that on another part at 18% for 2 years. Find the two sums.

  1. Rs 620, Rs 465

  2. Rs 600, Rs 485

  3. Rs 520, Rs. 565

  4. Rs 630, Rs 655

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

Let parts be x and 1085-x. Interest: (x*9*3)/100 = ((1085-x)*18*2)/100. 27x = 36(1085-x) => 27x = 39060 - 36x => 63x = 39060 => x = 620. Other part = 1085-620 = 465.

Multiple choice

In the following questions, calculate quantity I and quantity II, compare them and answer Quantity I- Compound interest (in Rs.), A certain sum of money P at 5% per annum for 3 years. Quantity II-Simple interest (in Rs.), same sum of money P at 5.5% per annum for 3 years.

  1. If quantity I > quantity II

  2. If quantity I < quantity II

  3. If quantity I ≥ quantity II

  4. if quantity I ≤ quantity II

  5. if quantity I = quantity II or no relation can be established
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Quantity I (CI) = P * ((1 + 0.05)^3 - 1) = P * (1.157625 - 1) = 0.157625P. Quantity II (SI) = P * 0.055 * 3 = 0.165P. Since 0.157625 < 0.165, Quantity I < Quantity II.

Multiple choice

An amount increases 0.5 times of itself in a time period of 5 years at simple interest per annum. If Rs. 15,000 is to be lent at the same rate of interest compunded annually, then what will be the total amount to be returned after a time period of 2 years?

  1. Rs. 18,200

  2. Rs. 18,400

  3. Rs. 18,150

  4. Rs. 18,000

  5. Rs. 18,250
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An increase of half the principal in 5 years at simple interest means a total simple interest rate of 50%, or 10% per year. Compounding Rs. 15,000 annually for 2 years gives 15,000 x 1.1^2 = Rs. 18,150.

Multiple choice

A loan has to be returned in two equal yearly installments each of Rs. 44,100. If the rate of interest is 5% p.a. compounded annually, then the total interest paid is

  1. Rs. 5,840

  2. Rs. 6,000

  3. Rs. 6,200

  4. Rs. 6,280
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Each installment P = 44100, r = 5%. Using the formula for installments: P = X / (1+r) + X / (1+r)^2. Total paid = 2 * 44100 = 88200. Principal = 44100 / 1.05 + 44100 / (1.05)^2 = 42000 + 40000 = 82000. Interest = 88200 - 82000 = 6200.

Multiple choice

A sum amounts to Rs. 14,395.20 at 9.25% p.a. simple interest in 5.4 years. What will be the simple interest on the same sum at 8.6% p.a. in 4.5 years?

  1. Rs. 3,715.20

  2. Rs. 3,627

  3. Rs. 3,797.76

  4. Rs. 3,672
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The total interest rate factor for the first period is 9.25% * 5.4 = 49.95%, meaning the amount is 149.95% of the principal. Solving 1.4995 * P = 14,395.20 gives a principal of Rs. 9,600, and the simple interest on this principal at 8.6% for 4.5 years is 9,600 * 0.086 * 4.5 = Rs. 3,715.20.

Multiple choice

Ankur invested X Rs. at the rate of 15% per annum compound interest for two years and get total interest of 5805 Rs. if Ankur invest (X + 7000) Rs. for another two year at additional rate of 5%, then what will be compound interest on that investment?

  1. 10500 Rs.

  2. 11000 Rs.

  3. 11500 Rs.

  4. 15100 Rs.

  5. 12500 Rs.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For 15% CI, 2 years, total interest = 32.25% of X. 0.3225X = 5805 => X = 18000. New investment = 25000 at 20% for 2 years. CI = 25000 * (1.2^2 - 1) = 11000.

Multiple choice

Ayush divided 2189 in three parts such that interest on them after 1, 2, 3 years respectively may be equal. The rate of SI is 4% per annum in all case. What is the smallest part of the three part?

  1. a) 702

  2. b) 398

  3. c) 425

  4. d) 756

  5. e) 1093
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For equal simple interest over 1, 2, and 3 years, the parts must be proportional to 1, 1/2, and 1/3, or 6:3:2. Since 2189/11 = 199, the parts are 1194, 597, and 398. The smallest part is 398.