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

Mr. X wants to take a loan of 10 lakh to buy his dream car. He approaches two financers, F1 and F2, for the loan. Both financers agree to give the loan but at different terms. F1 charges interest at 20% per annum, compounded annually, while F2 charges simple interest at 25% per annum. If Mr. X wants to repay the loan in a single payment at the end of n years, find the maximum value of n for which F1 is a better preference for Mr. X when compared to F2.

  1. 3

  2. 4

  3. 2

  4. 5

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

F1 amount: 10(1+0.2)^n = 10(1.2)^n. F2 amount: 10(1+0.25*n). We need 1.2^n < 1+0.25n. For n=1, 1.2 < 1.25 (True). For n=2, 1.44 < 1.5 (True). For n=3, 1.728 < 1.75 (True). For n=4, 2.0736 > 2.0 (False). Thus, max n is 3.

Multiple choice

An amount of money was invested by Sam. What is the rate percent per annum? (1) Simple interest for 3 years on the amount of money is \$240. (2) Compound interest on the sum of money for 2 years is \$170.

  1. Statement (1) ALONE is sufficient, but statement (2) ALONE is not sufficient.

  2. Statement (2) ALONE is sufficient, but statement (1) ALONE is not sufficient.

  3. BOTH statements TOGETHER are sufficient, but NEITHER statement ALONE is sufficient.

  4. EACH statement ALONE is sufficient.

  5. Statements (1) and (2) TOGETHER are NOT sufficient.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Statement 1: SI = PRT/100 -> 240 = P*R*3/100 -> PR = 8000. Cannot find R without P. Statement 2: CI = P((1+R/100)^2 - 1) = 170. Cannot find R without P. Together: PR = 8000 -> P = 8000/R. Substitute into CI: (8000/R) * (2R/100 + R^2/10000) = 170. This allows solving for R.

Multiple choice

Directions: Answer the question independently. Given that the total interest paid over 25 years is 100% more than the borrowed principal 'P' at a certain rate of simple interest r. At the same rate of simple interest r, the total interest paid over n years is 200% more than the borrowed principal '2P'. What is the ratio of the total interest paid on a sum of money '4P' at the same rate of simple interest 'r' over (50 - n) years to the borrowed principal '4P'?

  1. 1 : 1

  2. 3 : 2

  3. 4 : 3

  4. 4 : 5
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice

There were two moneylenders. The first moneylender gave the money for 6 years at a certain rate of simple interest. The second moneylender gave the same amount of sum to another person at 3% higher rate than the first moneylender for the same period of time and he fetched 9000 rupees more. What was the sum amount?

  1. Rs. 40,000

  2. Rs. 50,000

  3. Rs. 55,000

  4. Rs. 60,000

  5. Rs. 65,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the sum be P and the rate be R. The interest difference is (P * (R+3) * 6 / 100) - (P * R * 6 / 100) = 9000. This simplifies to (P * 3 * 6) / 100 = 9000, so 18P = 900000, and P = 50000.

Multiple choice

Dhansukhlal deposited money in a cooperative bank which promised to quadruple his amount in 20 years under simple interest. Dhansukhlal decided to withdraw his money the moment it tripled. After how much time should he withdraw his money from the bank? [Interest is calculated per annum]

  1. 12 years 6 months

  2. 13 years 4 months

  3. 13 years

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest: Amount = P + P*R*T/100. Quadrupling means 4P = P + P*R*20/100, so 3 = R/5, R = 15%. Tripling means 3P = P + P*15*T/100, so 2 = 15T/100, T = 200/15 = 13.33 years = 13 years 4 months.