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 simple interest (S.I.) on a sum of Rs. 16000 is Rs. 3840 in 3 years. What will be the compound interest (C.I.) on Rs. 18000 at the same rate of interest in 2 years?

  1. Rs. 3144.5

  2. Rs. 3095.2

  3. Rs. 2756.4

  4. Rs. 2995.2

  5. Rs. 2332.8
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest on 16000 for 3 years is 3840, so the rate is 3840 / (16000 * 3) = 0.08 or 8%. Compound interest on 18000 at 8% for 2 years is 18000 * ((1.08)^2 - 1) = 18000 * 0.1664 = 2995.2.

Multiple choice

Directions: In the following question, you have to find out which of the following statements is/are redundant for determining the answer of the given question or can be dispensed with. What is the total compound interest earned at the end of 5 years? I. Simple interest earned on that amount at the same rate for the same period is Rs. 6,000. II. The rate of interest is 10% p.a. III. Compound interest for 5 years is more than the simple interest for that period by Rs. 515.

  1. Only II and III

  2. Only II and either I or III

  3. Only I and II

  4. I, II, or III

  5. All I, II and III
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

To calculate compound interest, you need the principal, rate, and time. Statement I gives SI, which allows finding the principal if the rate is known. Statement II gives the rate. Statement III gives the difference between CI and SI. Any combination of two of these is sufficient to find the CI.

Multiple choice

Directions: Compare the two quantities in A and B. Quantity A Quantity B P = $ 300 R = 5% T = 2 years Simple interest P = $ 250 R = 5% T = 2 years Compound interest

  1. Quantity A is greater than quantity B.

  2. Quantity B is greater than quantity A.

  3. Both quantities are equal.

  4. The relationship between the quantities cannot be determined.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity A: Simple Interest = 300 * 0.05 * 2 = 30. Quantity B: Compound Interest = 250 * (1 + 0.05)^2 - 250 = 250 * 1.1025 - 250 = 275.625 - 250 = 25.625. 30 > 25.625.

Multiple choice

Rs. 15,000 is given as loan by A in the firm in which he is partner too. On 31st March 2008, Calculate the amount of interest while the books are closed on 31st Dec. every year and there is no agreement regarding interest on loan.

  1. Rs. 675

  2. Rs. 750

  3. Rs. 1,500

  4. No interest
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to the Indian Partnership Act, in the absence of an agreement, interest on a partner's loan is payable at 6% per annum. The loan was given on March 31st, and the books close on Dec 31st, meaning the loan was held for 9 months. Interest = 15000 * 0.06 * (9/12) = 15000 * 0.06 * 0.75 = 675.

Multiple choice

A certain sum of money amounts to Rs. 80 at 5% and to Rs. 40 at 2% per annum simple interest. Find the sum and the time.

  1. Rs. 26.67, 100 years

  2. Rs. 13.33, 50 years

  3. Rs. 13.33, 100 years

  4. Rs. 21.33, 100 years

  5. Rs. 21.33, 50 years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A = P + P*R*T/100. 80 = P + P*5*T/100 -> 80 = P(1 + 0.05T). 40 = P(1 + 0.02T). Divide: 2 = (1 + 0.05T)/(1 + 0.02T). 2 + 0.04T = 1 + 0.05T -> T = 100. P(1 + 0.02*100) = 40 -> 3P = 40 -> P = 13.33.