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

Rohit took a loan of Rs. 30,000 from Rajesh. The condition of Rajesh set for Rohit was that for the first four years, the rate of interest would be at 10% simple interest per year and at 20% compound interest compounded annually from the fifth year onwards. Rohit payed foul and did not pay anything until the end of the sixth year. How much would he have to repay if he is to clear the entire amount only at the end of the sixth year?

  1. Rs. 60,480

  2. Rs. 50,500

  3. Rs. 42,800

  4. Rs. 42,000

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

First 4 years: SI = 30000 * 0.10 * 4 = 12000. Amount at end of 4 years = 42000. Next 2 years: CI at 20% = 42000 * (1.2)^2 = 42000 * 1.44 = 60480.

Multiple choice

A sum amounts to Rs. 7,562 in 4 years and to Rs. 8,469.44 in 5 years, at a certain rate per cent per annum when the interest is compounded yearly. If Rs. 10,000 at the same rate of interest is borrowed for two years, then what will be the compound interest (in Rs.)?

  1. 2,544

  2. 2,764

  3. 1,965

  4. 1,736
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A4 = P(1+r)^4 = 7562. A5 = P(1+r)^5 = 8469.44. (1+r) = 8469.44 / 7562 = 1.12. So r = 12%. P = 7562 / (1.12)^4 = 7562 / 1.5735 = 4805.8. CI for 2 years at 12% on 10000 = 10000 * (1.12^2 - 1) = 10000 * 0.2544 = 2544.

Multiple choice

Rs. 4,000 is given at 5% per annum for one year and interest is compounded half yearly. Rs. 2,000 is given at 40% per annum compounded quarterly for 1 year. The total interest received is nearest to:

  1. Rs. 1,333.30

  2. Rs. 1,888.80

  3. Rs. 1,130.70

  4. Rs. 1,444.40
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest 1: 4000 at 5% compounded half-yearly for 1 year (2 periods at 2.5%). A = 4000(1.025)^2 = 4000 * 1.050625 = 4202.5. Interest = 202.5. Interest 2: 2000 at 40% compounded quarterly for 1 year (4 periods at 10%). A = 2000(1.1)^4 = 2000 * 1.4641 = 2928.2. Interest = 928.2. Total interest = 202.5 + 928.2 = 1130.7.