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 general knowledge math & puzzles

The simple interest on a certain sum of money for 3 years is 225 and the compound interest on the same sum at the same rate for 2 years is 153 then the principal invested is

  1. 1500

  2. 2250

  3. 3000

  4. 1875
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let principal = P, rate = r. Simple Interest for 3 years: P × r × 3 = 225, so Pr = 75. Compound Interest for 2 years: P(1 + r)² - P = 153. Using Pr = 75, we get: P(1 + 2r + r²) - P = 153, P(2r + r²) = 153. Substituting Pr = 75: 2(75) + 75r = 153, giving r = 3/75 = 1/25 = 4%. Therefore P = 75/(1/25) = 1875. Verification: SI = 1875 × 0.04 × 3 = 225 ✓, CI = 1875(1.04)² - 1875 = 153 ✓

Multiple choice general knowledge math & puzzles

A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:

  1. 120

  2. 121

  3. 122

  4. 123
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For half-yearly compounding at 5% annual rate: Each half-year earns 2.5% interest. First deposit (Jan 1): 1600 for 2 half-years = 1600 × 1.025² = 1681. Second deposit (July 1): 1600 for 1 half-year = 1600 × 1.025 = 1640. Total = 1681 + 1640 = 3321. Interest gained = 3321 - 3200 = 121. Therefore, option B is correct.

Multiple choice general knowledge math & puzzles

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

  1. 625

  2. 630

  3. 640

  4. 650
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let sum = P. Simple Interest for 2 years at 4%: 2 × 0.04 × P = 0.08P. Compound Interest for 2 years at 4%: P(1.04)² - P = P(1.0816 - 1) = 0.0816P. Difference = 0.0816P - 0.08P = 0.0016P = 1. Therefore, P = 1/0.0016 = 625. Option A is correct.

Multiple choice

A Joint Stock Company issued 20,000 Equity Shares of Rs. 10 each. Amount due on these shares was as under: Rs. 2 on Application (1st January) Rs. 3 on Allotment (1st February) Rs. 3 on First Call (1st July) Rs. 2 on Final Call (1st Nov) Ajit paid full amount on 1,000 shares upto Final Call along with First Call. Vijay paid First Call and Final Call money along with Allotment on 500 shares. According to rules, 6% interest is payable on amount received in advance.

What is the value of interest payable to Ajit on Call-in-Advance?

  1. Rs. 40

  2. Rs. 38

  3. Rs. 45

  4. Rs. 123
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

 Interest payable on Ajit's Shares is Rs. 40 & calculated as follows: Advance Amount: Rs. 2,000 (1,000 shares x Rs. 2 of Final Call) Rate of Interest @ 6% Period: 1st July to 1st Nov = 4 months (2,000) x 6% x 4/12 = Rs. 40

Multiple choice

On 1.6.05 X draws a bill on Y for Rs. 25,000. At maturity, Y requests X to accept Rs. 5,000 in cash and noting charges incurred Rs. 100 and for the balance, X draws a bill on Y for 2 months at 12% p.a. Interest amount will be

  1. Rs. 410

  2. Rs. 420

  3. Rs. 440

  4. Rs. 400
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

After paying Rs. 5,000 in cash, the balance amount on which interest is calculated is Rs. 20,000 (Rs. 25,000 - Rs. 5,000). Interest for 2 months at 12% p.a. = Rs. 20,000 × 12% × 2/12 = Rs. 400. Noting charges of Rs. 100 are borne by Y and don't affect the interest calculation.

Multiple choice

Madhav, a shareholder of 1000 shares in Kumar Ltd. paid the amount due on first call and final call along with allotment money. The amount payable per share is Rs.10, which has to be paid equally on application, allotment and calls (payable on 1 January, 1 April, 1 August and 31 December). Calculate the interest payable to him on calls in advance.

  1. Rs. 100

  2. Rs. 162.50

  3. Rs. 185.42

  4. Rs. 225

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Advance of first call = Rs. 2500, interest rate @ 6% p.a, time duration 1 April-1 August = 4 months Interest = Rs. 50 Advance of second call = Rs. 2500, interest rate @ 6% p.a, time duration 1 April-31 December = 9 months Interest = Rs. 112.50 Total Interest Rs. 162.50 Option (A) is incorrect. You may take second call period 4 months, i.e. September- December. Option (C) is incorrect. You may take interest rate @5% applicable on calls in arrears. Option (D) is incorrect. You may take combined period of 9 months for both advances.

Multiple choice

The difference between simple interest and compound interest on a sum of money at 6% per annum for 2 years is Rs. 216. Find the sum.

  1. Rs. 50,000

  2. Rs. 65,000

  3. Rs. 60,000

  4. Rs. 62,000

  5. Rs. 70,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

It is correct answer.

Let the sum be Rs x.

Therefore,  Simple Interest = x*6*2/100 = 0.12x           Compound Interest = x (1+6/100)^2 - x =0.1236x    

Difference in CI and SI =0.12x - 0.1236x = 0.0036x 

Difference which is given = 216 * 10000/36= 60,000

Multiple choice

What will be the difference between the simple interest and compound interest compounded annually at the rate of 12% per annum on Rs. 5000 for two years?

  1. Rs. 47.50

  2. Rs. 72

  3. Rs. 70

  4. Rs. 128

  5. Rs. 63
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Compound interest (C.I.)=Amount-Principal Simple interest(S.I.)=Principal*Time*Rate%/100. Required difference is (5000(1+(12/100)2-5000)-(5000*12*2/100) =5000((28/25)*(28/25) -1)-1200 =5000((784-625)/625)-1200 = Rs. 72
It is the correct answer.

Multiple choice

There is a 60% increase in the amount in 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?

  1. Rs. 2160

  2. Rs. 3120

  3. Rs. 3972

  4. Rs. 6240

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

Let the principal = Rs. x Then, the amount = 160x/100 Therefore, interest = 160x/100 - x = 60x/100 So, the rate of interest = (SI x 100)/(P x T) = (60x/100) * 100/(x * 6) = 10% Now, we will find the amount of compound interest, which is A = P(1 + R/100)n A = Rs. 12,000(1 + 10/100)3 A = Rs. 15,972 CI = A - P = Rs. (15,972 - 12,000) = Rs. 3972