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

The rate of simple interest on a sum of money is 5% p.a. for the first 4 years, 8% p.a. for the next 3 years and 10% p.a. for the period beyond 7 years. If the simple interest accrued by the sum over a period of 10 years is Rs. 1,850, then the sum is:

  1. Rs. 1,500

  2. Rs. 2,750

  3. Rs. 1,650

  4. Rs. 2,500
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest is calculated as (P * R * T) / 100. For 10 years, the interest is (P * 5 * 4)/100 + (P * 8 * 3)/100 + (P * 10 * 3)/100 = 1850. This simplifies to (20P + 24P + 30P)/100 = 1850, or 74P/100 = 1850. Solving for P gives 185000 / 74 = 2500.

Multiple choice

A sum of money becomes Rs. 35,680 after 3 years and Rs. 53,520 after 6 years at a certain rate percentage p.a., interest compounded yearly. What is the compound interest on the same sum in the first case? (Your answer should be nearest to an integer)

  1. Rs. 11,983

  2. Rs. 11,893

  3. Rs. 10,842

  4. Rs. 11,938
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let P be the principal and R be the rate. A3 = P(1+r)^3 = 35680. A6 = P(1+r)^6 = 53520. (1+r)^3 = 53520 / 35680 = 1.5. P = 35680 / 1.5 = 23786.67. Compound interest for 3 years = 35680 - 23786.67 = 11893.33.

Multiple choice

A sum of Rs. 5,000 amounts to Rs. 7,200 in 8 years at a certain rate per cent p.a, interest compounded yearly. What will be the compound interest on a sum of Rs. 6,550 in 4 years at the same rate of interest?

  1. Rs. 1,290

  2. Rs. 1,285

  3. Rs. 1,415

  4. Rs. 1,310
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

5000(1+r)^8 = 7200 => (1+r)^8 = 1.44 => (1+r)^4 = sqrt(1.44) = 1.2. Compound interest on 6550 in 4 years = 6550 * ((1+r)^4 - 1) = 6550 * (1.2 - 1) = 6550 * 0.2 = 1310.

Multiple choice

Monika buys a Samsung's 360 litre refrigerator from M/s Coldrush Agencies for Rs. 42,000. She makes a down payment of Rs. 12,000 and the remaining amount in 4 equal half yearly instalments. If M/s Coldrush Agencies charge an interest of 10% per annum, approximately what amount Monika has to pay every six months?

  1. Rs. 8230

  2. Rs. 8600

  3. Rs. 8460

  4. Rs. 8620
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 42,000 - 12,000 = 30,000. Interest is 10% per annum, so 5% per half-year. Using the formula for equal installments on a reducing balance, the amount is approximately 8460.

Multiple choice

A man invested in two different schemes A & B and investment in scheme A is 25% more than that of scheme B. Scheme A offered SI at the rate of (R - 2.5)% for two year while scheme B offered SI at the rate of (R + 5)% for three years and ratio of interest received by man from scheme A to that of scheme B is 5 : 12. Find the total interest received by man, if he will invest Rs 2250 at the rate of 2R% per annum on CI for two years?

  1. 920 Rs

  2. 990 Rs

  3. 960 Rs

  4. 900 Rs

  5. 850 Rs
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

The rate of interest on two different schemes is the same and it is 20%. But in one of the schemes, the interest is compounded half yearly and in the other, the interest is compounded annually. Equal amounts are invested in the schemes. If the difference of the returns after 2 years is Rs. 482, then what is the principal amount in each scheme?

  1. Rs. 10,000

  2. Rs. 16,000

  3. Rs. 20,000

  4. Rs. 24,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For annual compounding, A = P(1 + 0.20)^2 = 1.44P. For half-yearly, A = P(1 + 0.10)^4 = P(1.1)^4 = 1.4641P. The difference is 0.0241P = 482. P = 482 / 0.0241 = 20000.