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

Alice has \$1,000 and Bob has \$900. They want to invest these sums in two different funds that offer the same interest rate of 10%. Fund A offers simple interest, while fund B offers compound interest. Quantity A Interest earned by Alice in fund A over a two-year period Quantity B Interest earned by Bob in fund B over a two-year period

  1. Quantity A is greater.

  2. Quantity B is greater.

  3. The two quantities are equal.

  4. The relationship cannot be determined from the information given.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Alice's simple interest = 1000 * 0.10 * 2 = 200. Bob's compound interest = 900 * (1.10^2 - 1) = 900 * (1.21 - 1) = 900 * 0.21 = 189. Since 200 > 189, Quantity A is greater.

Multiple choice

A person invested Rs.20000 in compound interest at 10% per annum for 2 years. If he invested the amount received as interest after two years in compound interest at the same rate of interest for the same period, then find the amount received finally.

  1. 2389

  2. 3467

  3. 5082

  4. 3412

  5. 5623
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest after 2 years at 10% CI on 20000: 20000 * (1.1^2 - 1) = 4200. Now invest 4200 at 10% CI for 2 years: 4200 * (1.1^2) = 4200 * 1.21 = 5082.

Multiple choice

Deepika deposited a certain amount of money in a scheme with an annual interest rate of 4%. Three years later, she noticed that the compound interest she earned was Rs. 760 more than the simple interest. How much did Deepika initially invest?

  1. Rs. 1,25,650

  2. Rs. 1,56,250

  3. Rs. 1,65,650

  4. Rs. 2,12,650
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For 3 years, CI - SI = P * (r/100)^2 * (3 + r/100) = 760. P * (0.04)^2 * (3.04) = 760. P * 0.0016 * 3.04 = 760. P * 0.004864 = 760. P = 760 / 0.004864 = 156250.

Multiple choice

The simple interest accured on a sum of certain principle in 8 yrs. at 13%p.a is rs. 6500. What would be the compund interest accured on that principal at the rate of 8% p.a in 2 yrs ? A.1040 rs. B.1260 rs. C.1250 rs. D.None of these E. Can not be determined

  1. D

  2. E

  3. B

  4. A

  5. C
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

From simple interest, P x 13 x 8/100 = 6500, so the principal is 6250 rupees. The compound interest for 2 years at 8% is 6250[(1.08)^2 - 1] = 1040 rupees, corresponding to the encoded answer A.