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

Anil invests Rs. 22,000 for 6 years in a scheme with 4% interest per annum, compounded half-yearly. Separately, Sunil invests a certain amount in the same scheme for 5 years, and then reinvests the entire amount he receives at the end of 5 years, for one year at 10% simple interest. If the amounts received by both at the end of 6 years are equal, then the initial investment, in rupees, made by Sunil is

  1. 20,860

  2. 20,808

  3. 20,480

  4. 20,640
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Anil's amount = 22000 * (1 + 0.04/2)^(6*2) = 22000 * (1.02)^12. Sunil's amount is calculated based on 5 years of compound interest and 1 year of simple interest. Equating the two allows solving for the principal.

Multiple choice

Anindita invests a total of 1 lakh rupees distributed across three schemes A, B and C for a period of two years. These schemes offer an interest rate of 10%, 8% and 12% per annum, respectively, each compounded annually. If the initial investment amount in scheme A is 30000 rupees and the total interest earned from all the three schemes during the first year is 10600 rupees, then the total interest earned, in rupees, from all the three schemes for the second year is

  1. 10308

  2. 11748

  3. 22348

  4. 19708
Reveal answer Fill a bubble to check yourself
B Correct answer
Multiple choice

Priya invests Rs. 160,000 in a financial plan that offers 20% annual interest, compounded quarterly, for a period of 4 years. Meanwhile, Karan invests a certain sum in the same plan for 3 years and then reinvests the amount he receives at the end of 3 years into a scheme offering simple interest at 8% per annum for 1 additional years. If both Priya and Karan receive equal total amounts at the end of 4 years, what was the initial amount invested by Karan?

  1. Rs. 183,250

  2. Rs. 180,075

  3. Rs. 182,430

  4. Rs. 212,790
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Priya's amount: 160000 * (1 + 0.20/4)^(4*4) = 160000 * (1.05)^16 = 348250.8. Let Karan's investment be P. After 3 years at 20% compounded quarterly: P * (1.05)^12. Then simple interest for 1 year at 8%: [P * (1.05)^12] * 1.08 = 348250.8. Solving for P gives approx 180075.

Multiple choice

A person deposited Rs. (K + 800) at 20% p.a. compound interest for two years, and received interest of Rs. 3388. If instead he invested Rs (K – 600) at the same rate for the same period, what would be the compound interest received by him (in Rs)?

  1. 2100

  2. 2750

  3. 2340

  4. 2772

  5. 3150
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Compound interest formula: A = P(1 + r/n)^(nt). Here, 3388 = (K + 800) * ((1 + 0.20)^2 - 1). 3388 = (K + 800) * (1.44 - 1) = (K + 800) * 0.44. K + 800 = 7700, so K = 6900. Then K - 600 = 6300. Interest = 6300 * 0.44 = 2772.

Multiple choice

Sana invests Rs. 24,000 for 5 years in a scheme that offers 5% simple interest per annum. Meanwhile, Meera invests a certain sum in the same scheme for 3 years, and then reinvests the entire amount she receives at the end of 3 years for another 2 years at 4% simple interest. If the amount received by Meera at the end of 5 years exceeds that received by Sana by Rs. 19,680, what was the initial amount invested by Meera?

  1. Rs. 38,000

  2. Rs. 39,000

  3. Rs. 40,000

  4. Rs. 41,000

  5. Rs. 42,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Sana's final amount after 5 years is 24,000 * (1 + 0.05 * 5) = Rs. 30,000. For Meera, her amount after 3 years is 1.15P, and after reinvesting it for 2 years at 4%, her final amount is 1.15P * 1.08 = 1.242P. Since Meera's final amount exceeds Sana's by Rs. 19,680, we have 1.242P - 30,000 = 19,680, which gives P = Rs. 40,000.

Multiple choice

Over three consecutive years, the additional amount earned by Ritesh from an investment at a fixed annual compound interest rate was Rs. 2,418.75 in the second year and Rs. 2,600.16 in the third year. Based on this pattern, approximately how much interest will Ritesh earn during the fourth year?

  1. Rs. 2,957.17

  2. Rs. 2,759.71

  3. Rs. 2,795.17

  4. Rs. 2,975.71

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

The interest earned in consecutive years follows a geometric progression because the principal increases by the interest earned. The ratio of the third year interest to the second year interest is 2600.16 / 2418.75 = 1.075. Multiplying the third year interest by this ratio gives 2600.16 * 1.075 = 2795.172.

Multiple choice

Rajat invested a certain sum in Bank Beta at simple interest for a fixed period, while Meera deposited Rs. 20,000 in Bank Gamma also offering simple interest for twice the period for which Rajat invested in Bank Beta. The annual interest rate at Bank Gamma is twice the rate offered by Bank Beta. Had Rajat invested the same amount in Bank Alpha, which offers 6% per annum compounded half-yearly, for one year, the interest earned would have been equal to what he actually earned from Bank Beta. What is the total interest, in rupees, earned by Meera?

  1. 8,000

  2. 4,872

  3. 4,000

  4. 4,850
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Rajat: P, r, t. Interest = Prt/100. Bank Alpha: P(1+6/200)^2 - P = P(1.03^2 - 1) = 0.0609P. So Prt/100 = 0.0609P, rt = 6.09. Meera: 20000 * (2r) * (2t) / 100 = 800 * rt = 800 * 6.09 = 4872.

Multiple choice

A company dealer sells home appliances on installments and claims to make only 15% compound interest, compounded annually. A man buys a geyser from the dealer and agrees to pay in two equal yearly installments of Rs. 1058 each. What is the original price of the geyser?

  1. Rs.1800

  2. Rs.1820

  3. Rs.1720

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

Let P be the original price. Installments are 1058. P = 1058 / 1.15 + 1058 / (1.15)^2 = 920 + 800 = 1720.