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

Arjun, Priya, and Raj have invested their funds in the ratio of 2 : 3 : 4 in different investment plans, which provide them annual interest rates in the ratio of 7 : 5 : 3. If Raj's annual interest earned is Rs. 1,500 less than Arjun's, what is the total interest earned from these investment plans in a year?

  1. Rs. 22,350

  2. Rs. 23,250

  3. Rs. 30,750

  4. Rs. 32,250
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Investment ratio 2:3:4, Interest rate ratio 7:5:3. Interest earned ratio = (2*7):(3*5):(4*3) = 14:15:12. Let interest be 14k, 15k, 12k. Arjun's interest = 14k, Raj's interest = 12k. Difference = 2k = 1500. k = 750. Total interest = 14k + 15k + 12k = 41k = 41 * 750 = 30750.

Multiple choice

The simple interest accrued on a certain principal amount is Rs. 800 in four years at the rate of 6% p.a. What would be the simple interest accrued on thrice that principal at the rate of 10% p.a. in 2 years?

  1. Rs. 2,000

  2. Rs. 3,025

  3. Rs. 2,250

  4. Rs. 2,150

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

Simple interest is calculated as (Principal * Rate * Time) / 100. Given SI=800, T=4, R=6, the principal is (800 * 100) / (4 * 6) = 3333.33. For the new scenario, the principal is 3 * 3333.33 = 10000, R=10, T=2, so SI = (10000 * 10 * 2) / 100 = 2000.

Multiple choice

Directions: In the following item, Quantity I and Quantity II are given. Determine the relationship between the quantities and choose the appropriate option. Quantity I: Compound interest on Rs. 5,000 at 10% per annum for 1 year Quantity II: Compound interest on Rs. 4,500 at 12% per annum for 1 year

  1. Quantity I > Quantity II

  2. Quantity I < Quantity II

  3. Quantity I ≥ Quantity II

  4. Quantity I ≤ Quantity II

  5. Quantity I = Quantity II, or No relation
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Quantity I is 5000 * 0.10 = 500. Quantity II is 4500 * 0.12 = 540. Since 500 < 540, Quantity I is less than Quantity II.

Multiple choice

Ravi has a due debt of Rs. 16,500 from a bank, due in 3 years at 10% per annum simple interest, and he agrees to pay it back in 3 equal annual installments. What is the amount of each installment?

  1. Rs. 5,400

  2. Rs. 4,500

  3. Rs. 5,000

  4. Rs. 6,800

  5. Rs. 7,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

To find the installment, use the formula for equal annual installments under simple interest: P = [I * (1 + r*t1) + I * (1 + r*t2) + I * (1 + r*t3)], where I is the installment. Solving 16500 = I * (1 + 0.1*2) + I * (1 + 0.1*1) + I * (1 + 0.1*0) leads to 16500 = 3.3I, giving I = 5000.

Multiple choice

Vikram received a sum of money, denoted as x, from his grandfather and chose to invest it in a fixed deposit that offers simple interest. After 6 years, the total amount in the deposit grew to Rs. 14,448. If the fixed deposit had an annual interest rate of 12%, what is the original principal amount 'x' that Vikram invested?

  1. Rs. 8,100

  2. Rs. 8,250

  3. Rs. 8,400

  4. Rs. 8,550

  5. Rs. 8,700
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Amount = P(1 + rt/100). 14448 = x(1 + 0.12 * 6) = x(1 + 0.72) = 1.72x. x = 14448 / 1.72 = 8400.

Multiple choice

A savings account offers an annual compound interest rate of 4%, compounded quarterly. If Sam deposits Rs. 2,000 into the account at the beginning of the year, how much interest to the nearest rupee will he earn by the end of the year?

  1. 75

  2. 78

  3. 81

  4. 83

  5. 84
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Principal = 2000, Rate = 4% annually, compounded quarterly (1% per quarter). Amount after 4 quarters = 2000 * (1 + 0.01)^4 = 2000 * 1.040604 = 2081.208. Interest = 81.208, which rounds to 81.

Multiple choice

A fixed deposit account offers an annual compound interest rate of 6%, compounded semi-annually. If Ramesh deposits Rs. 5,000 on January 1st and another Rs. 5,000 on July 1st of the same year, how much total interest will he earn by December 31st?

  1. Rs. 435.25

  2. Rs. 442.35

  3. Rs. 454.50

  4. Rs. 465.55

  5. Rs. 478.50
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The first 5000 earns interest for two 6-month periods at 3% per period: 5000 * (1.03)^2 - 5000 = 304.50. The second 5000 earns interest for one 6-month period: 5000 * 0.03 = 150. Total interest = 304.50 + 150 = 454.50.