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

Michael Bolton has \$90,000 with him. He purchases a car, a laptop and a flat for \$15,000, $13,000 and $35,000 respectively and puts the remaining money in a bank deposit that pays compound interest @15% per annum. After 2 years, he sells off the three items at 80% of their original price and also withdraws his entire money from the bank by closing the account. What is the total change in his asset?

  1. -4.5%

  2. +3.5%

  3. -4.32%

  4. +5.5%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Initial assets: 90,000. Spent: 15k+13k+35k = 63k. Remaining: 27k. Bank deposit after 2 years: 27000 * (1.15)^2 = 27000 * 1.3225 = 35707.5. Sale of items: 80% of 63k = 50400. Total final assets = 35707.5 + 50400 = 86107.5. Change = 86107.5 - 90000 = -3892.5. Percentage change = (-3892.5 / 90000) * 100 = -4.325%.

Multiple choice

An amount of Rs 12820 due 3 years hence, is fully repaid in three annual instalments starting after 1 year. The first instalment is 1/2 the second instalment and the second instalment is 2/3 of the third instalment. If the rate of interest is 10% per annum, find the first instalment.

  1. Rs 2400

  2. Rs 1800

  3. Rs 2000

  4. Rs 2500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let the instalments be x, 2x, and 3x. The present value of these instalments at 10% interest is x/1.1 + 2x/(1.1^2) + 3x/(1.1^3) = 12820. Solving this equation yields x = 2000.

Multiple choice

There are two schemes. Scheme 1: Simple interest at 50% per annum for one and half years. Scheme 2: Compound interest compounded half-yearly at 50% per annum for one and half years. Which scheme is better and approximately by how much percent?

  1. Scheme 2 is better by 15% percent

  2. Scheme 1 is better by 15% percent

  3. Scheme 1 is better by 20% percent

  4. Scheme 2 is better by 20% percent

  5. Both schemes give same amount
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Scheme 1: SI = 50% * 1.5 = 75%. Scheme 2: CI at 25% per half-year for 3 periods. Amount = P(1 + 0.25)^3 = P(1.25)^3 = P(1.953125). Interest = 95.3125%. Difference = 95.31 - 75 = 20.31%. Approximately 20%.

Multiple choice

Suresh invested a sum of money in Scheme A for 17 years, which offered at a rate 7% p.a for 1st 11 years and 8% p.a for last 6 years. The amount received from Scheme A after 17 years was then invested in scheme B, which offers compound interest at a rate 12% p.a. If the interest received after 2 years from Scheme B was Rs. 5724, what was the sum invested inScheme A?

  1. A. 12000

  2. 12500

  3. 10000

  4. 10500

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

Let P be the sum. Amount after 17 years = P * (1 + 0.07*11 + 0.08*6) = P * (1 + 0.77 + 0.48) = 2.25P. Compound interest on 2.25P for 2 years at 12% is 2.25P * ((1.12)^2 - 1) = 2.25P * 0.2544 = 0.5724P. Setting 0.5724P = 5724 gives P = 10000.

Multiple choice

If the principal is increased by Rs.350, the simple interest increases by Rs.250. If the time period is doubled, the simple interest increases by 2500. Find the Compound Interest on the original principal for half of the original time period at the same rate.

  1. Rs.600

  2. Rs.800

  3. Rs.650

  4. Data Insufficient
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest SI = P*R*T/100. Changes in P and T provide equations, but there are three variables (P, R, T) and only two equations. Thus, the original principal, rate, and time cannot be uniquely determined.

Multiple choice

Darren had to pay a loan of Rs. 56440 in 2 annual instalments where the first payment is half of the second payment. If the interest is calculated annually at the rate of 5% per annum on the balance amount, then what is the first payment?

  1. Rs. 20300

  2. Rs. 20401

  3. Rs. 20554

  4. Rs.20612
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the first payment be x and the second be 2x. The total amount is 56440. The interest is applied to the balance after the first payment. Solving the equation x + 2x(1 + 0.05)^-1 = 56440 leads to the result.

Multiple choice

Rs.12615 is divided between a sister and brother who are 12 and 10 years old respectively, in such a way that if their portions are invested at the rate of 5% per annum compound interest, they shall receive equal amounts on reaching 21 years of age. How much money does the sister get initially?

  1. Rs.6600

  2. Rs.6550

  3. Rs.6450

  4. Rs.6615
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let amounts be P1 and P2. P1(1.05)^9 = P2(1.05)^11. P1 = P2(1.05)^2 = P2(1.1025). P1 + P2 = 12615. 2.1025*P2 = 12615. P2 = 6000. P1 = 12615 - 6000 = 6615.