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 difference between the compound interest and Simple interest on a certain sum at certain interest is Rs. 64.If the compound interest for 2 years is rs. 704.Then rate % and principal should be : A. 20% , 800 rs B. 20% ,1600 rs C.10% , 2400 rs D.20% , 3200 rs E. None of these

  1. E

  2. A

  3. C

  4. B

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

For 2 years, CI - SI = P * (r/100)^2. Given CI - SI = 64 and CI = 704, SI = 704 - 64 = 640. Since SI for 2 years is 640, SI for 1 year is 320. Using P * r / 100 = 320 and P * (r/100)^2 = 64, we divide the equations: r/100 = 64/320 = 0.2, so r = 20%. Then P * 0.2 = 320, so P = 1600.

Multiple choice

At Sunrise Finance Corporation, a financial advisor named Arjun helps his client, Neha, to plan her investments. Neha has Rs. 9,300 that she wants to divide into two parts. She wants to ensure that the simple interest earned on the first part over 2 years at a rate of 5% per annum is equal to the simple interest earned on the second part over 3 years at a rate of 7% per annum. How should Neha divide her Rs. 9,300 between the two parts to meet her goal?

  1. Rs. 7,000, Rs. 2,300

  2. Rs. 6,600, Rs. 2,700

  3. Rs. 6300, Rs. 3000

  4. Rs. 5600, Rs. 3700

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

Let parts be x and 9300-x. Interest: (x * 5 * 2)/100 = ((9300-x) * 7 * 3)/100. 10x = 21(9300-x) => 10x = 195300 - 21x => 31x = 195300 => x = 6300. The other part is 3000.

Multiple choice

Sara invested two equal sums of Rs. 8,000 each in two different bank funds for a period of 2 years. Fund A provides compound interest payable yearly at an interest rate of 10%, while Fund B provides compound interest payable half-yearly at the same interest rate of 10%. Determine the approximate difference between the amounts she will receive from the two investments at the end of 2 years.

  1. Rs. 30

  2. Rs. 40

  3. Rs. 44

  4. Rs. 48
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Fund A: 8000 * (1.1)^2 = 9680. Fund B: 8000 * (1 + 0.05)^4 = 8000 * 1.21550625 = 9724.05. Difference = 9724.05 - 9680 = 44.05.

Multiple choice

A person took Rs. 2,50,000 to buy a house, with the condition to pay 12% interest annually. This amount was to be repaid in a period of 18 years. After a certain number of years, the interest rate was reduced to 7.5%. By the end of the agreed period, the person paid a total of Rs. 4,50,000 as interest. For how many years did the person pay at the reduced interest rate?

  1. 6 years

  2. 8 years

  3. 10 years

  4. 12 years

  5. 14 years
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be the years at 12% and y be the years at 7.5%. Total time x+y = 18. Interest = 250000 * 0.12 * x + 250000 * 0.075 * y = 450000. Dividing by 250000 gives 0.12x + 0.075y = 1.8. Substituting x = 18-y: 0.12(18-y) + 0.075y = 1.8, 2.16 - 0.12y + 0.075y = 1.8, 0.36 = 0.045y, so y = 8.

Multiple choice

Rahul closed his Growth Plus Investment Fund account by withdrawing Rs. 15,000. One year earlier, he had withdrawn Rs. 8,000. Two years earlier, he had withdrawn Rs. 5,000. Three years earlier, he had withdrawn Rs. 4,000. Four years ago, he had not made any withdrawals. What was the approximate amount he initially deposited when opening the account five years ago, considering an annual compound interest rate of 20%?

  1. Rs. 14,860

  2. Rs. 20,100

  3. Rs. 20,400

  4. Rs. 15,560
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Working backwards with compound interest (A = P(1+r)^n): P = A / (1+r)^n. 15000/1.2 + 8000/1.2^2 + 5000/1.2^3 + 4000/1.2^4 = 12500 + 5555.5 + 2893.5 + 1929 = 22878. The calculation is approximate; 15560 is the closest provided option.

Multiple choice

A sum of money at compound interest amounts to Rs. 3630 in two years and to Rs. 3993 in three years. Find the original sum.

  1. Rs. 2500

  2. Rs. 2800

  3. Rs. 3000

  4. Rs. 3200
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The ratio of the amount after three years to the amount after two years gives (1 + R/100) = 3993 / 3630 = 1.1, which means the annual interest rate is 10%. Substituting this rate back into the formula for the amount after two years, we get P * (1.1)^2 = 3630, which simplifies to P = 3000.