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

Jessica has been saving for her dream vacation and decides to invest $15,000 in a savings account that offers a simple annual interest rate of 5%. Excited to see her savings growth, she wants to know how much money she will have in total after 9 months of investment. How much will Jessica have in her account after 9 months, including the interest earned?
  1. $10,650.25
  2. $11,500.50
  3. $12,560.50
  4. $15,562.50
  5. $16,575.25
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Principal = 15000, Rate = 5% per year, Time = 9 months = 9/12 = 0.75 years. Simple Interest = P*R*T = 15000 * 0.05 * 0.75 = 562.5. Total amount = 15000 + 562.5 = 15562.5.

Multiple choice

Emily wants to buy a car after 5 years and decides to deposit $15,000 in a savings account that compounds interest annually at a rate of 5.5%. Approximately, what amount will she get at the end of 5 years?
  1. $18,600
  2. $19,600
  3. $23,600
  4. $26,600
  5. $28,600
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using the compound interest formula A = P(1 + r)^t, we calculate 15000 * (1.055)^5. 1.055^5 is approximately 1.30696, and 15000 * 1.30696 equals approximately 19604.4.

Multiple choice

John and Maria make deposits through different schemes at the same bank. John deposits an amount at an interest rate of 5% per annum, while Maria deposits a different amount at an interest rate of 15% per annum. At the end of one year, both receive the same amount of interest. Quantity A The overall interest rate earned by the depositor on the total amount deposited in the bank Quantity B 8%

  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
B Correct answer
Explanation

Let P1 and P2 be the amounts deposited. Interest is 0.05*P1 = 0.15*P2, so P1 = 3*P2. The total interest is 0.05*P1 + 0.15*P2 = 0.05*(3*P2) + 0.15*P2 = 0.30*P2. The total principal is P1 + P2 = 4*P2. The overall interest rate is (0.30*P2) / (4*P2) = 0.075 or 7.5%. Since 7.5% < 8%, Quantity B is greater.

Multiple choice

Mr. Hamilton invested an amount of Rs. 13,900 divided in two different schemes A and B atthe simple interest rate of 14% p.a. and 11% p.a. respectively. If the total amount of simpleinterest earned in 2 years be Rs. 3508, what was the amount invested in Scheme B?

  1. Rs. 6400

  2. Rs. 6500

  3. Rs. 7200

  4. Rs. 7500

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

Let x be the amount in Scheme A and (13900 - x) in Scheme B. Total interest = (x * 0.14 * 2) + ((13900 - x) * 0.11 * 2) = 3508. Solving: 0.28x + 3058 - 0.22x = 3508, so 0.06x = 450, x = 7500. Scheme B = 13900 - 7500 = 6400.

Multiple choice

Alex invested a total of \$5,000. Part of the money was invested in a savings account that paid 6 percent simple annual interest, and the rest was invested in a bond that paid 4 percent simple annual interest. If the total interest earned at the end of the first year from these investments was \$240, how much did Alex invest at 6 percent and how much at 4 percent?
  1. \$1,500 at 6% and \$3,500 at 4%
  2. \$2,000 at 6% and \$3,000 at 4%
  3. \$2,500 at 6% and \$2,500 at 4%
  4. \$3,000 at 6% and \$2,000 at 4%
  5. \$3,500 at 6% and \$1,500 at 4%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be amount at 6%, (5000-x) at 4%. 0.06x + 0.04(5000-x) = 240. 0.06x + 200 - 0.04x = 240. 0.02x = 40. x = 2000. So 2000 at 6% and 3000 at 4%.

Multiple choice

A small business owner obtained a \$10,000 loan at a simple annual interest rate of r percent to purchase new office equipment. After one year, the owner made a single payment of \$11,200 to repay the loan, including the interest. What is the value of r?

  1. 10.5%

  2. 11.0%

  3. 11.5%

  4. 12.0%

  5. 12.5%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The interest earned is 11,200 - 10,000 = 1,200. Using the simple interest formula I = P*r*t, where P = 10,000, t = 1, and I = 1,200, we get 1,200 = 10,000 * r * 1. Solving for r gives r = 1,200 / 10,000 = 0.12, which is 12%.

Multiple choice

John wants to buy a new laptop. To save for the purchase, he invests $8,000 at a simple annual interest rate of 5%. What will be the value of the investment after 4 months?
  1. $8,133
  2. $8,250
  3. $8,275
  4. $8,300
  5. $8,350
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Simple interest is calculated as I = P * r * t. Here, P = 8000, r = 0.05, and t = 4/12 = 1/3 years. Thus, I = 8000 * 0.05 * (1/3) = 400 / 3 = 133.33, making the total value 8133.33, which rounds to 8133.

Multiple choice

A startup founder invests \$15,000 at an annual interest rate, compounded semiannually. The founder wants to earn at least \$3,150 in interest over one year. What is the least annual interest rate that would meet this goal?

  1. 20%

  2. 25%

  3. 27%

  4. 28%

  5. 32%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Principal P = 15000, Interest I = 3150, Time t = 1 year, compounded semiannually (n=2). Formula: A = P(1 + r/2)^(2*1). 18150 = 15000(1 + r/2)^2. 1.21 = (1 + r/2)^2. 1.1 = 1 + r/2. r/2 = 0.1, so r = 0.2 or 20%.

Multiple choice

Emily wants to save for a new car. She decides to invest $3,500 at an annual interest rate of 4%, compounded annually. She plans to check the value of her investment after 5 years. What should be the approximate value of Emily's investment at the end of 5 years?
  1. $4,000
  2. $4,120
  3. $4,260
  4. $4,300
  5. $4,340
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Compound interest formula: A = P(1 + r/100)^n = 3500 * (1.04)^5. 1.04^5 is approximately 1.21665. 3500 * 1.21665 = 4258.275. This is closest to 4260.

Multiple choice

Maria deposited \$6,000 at 5% simple annual interest and \$12,000 at z% simple annual interest. The total amount of interest earned by the two deposits in one year was $1,050. Quantity A z Quantity B 4.5

  1. Quantity A is greater.

  2. Quantity B is greater.

  3. The two quantities are equal.

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

Interest = (6000 * 0.05) + (12000 * z/100) = 1050. 300 + 120z = 1050. 120z = 750. z = 750/120 = 6.25. Since 6.25 > 4.5, Quantity A is greater.