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

In 4 years, an amount of Rs. 6,000 becomes Rs. 8,000 at a certain rate of simple interest. In what time at the same simple interest rate, will an amount of Rs. 525 become Rs. 700?

  1. 2 years

  2. 3 years

  3. 4 years

  4. 5 years
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The interest earned on 6000 in 4 years is 2000. Interest rate R = (2000 * 100) / (6000 * 4) = 100/12 = 8.33%. For 525 to become 700, interest needed is 175. Time T = (175 * 100) / (525 * 8.33) = 17500 / 4375 = 4 years.

Multiple choice

A sum of Rs. 87,500 was invested by Kishor at 10% per annum compound interest. If, at the end of each year, income tax at the rate of 20% is deducted from the interest earned, then approximately how much amount would he have received after 3 years?

  1. Rs. 1,50,225

  2. Rs. 1,25,125

  3. Rs. 1,10,225

  4. Rs. 1,09,250

  5. Rs. 99,522
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Year 1: Interest = 87500 * 0.1 = 8750. Tax = 0.2 * 8750 = 1750. Net interest = 7000. New principal = 94500. Year 2: Interest = 9450. Tax = 1890. Net interest = 7560. New principal = 102060. Year 3: Interest = 10206. Tax = 2041.2. Net interest = 8164.8. Final amount = 102060 + 8164.8 = 110224.8.

Multiple choice

In 5 years, the interest earned was 40% of the principal at a certain simple interest rate. What will be the compound interest earned (in ₹) on ₹24,000 in 3 years at the same rate?

  1. 6333

  2. 5233

  3. 6233

  4. 5333
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest = (P*R*T)/100. Given 40% of P in 5 years, R = 40/5 = 8% per annum. Compound interest on 24000 at 8% for 3 years is 24000 * ((1.08)^3 - 1) = 24000 * (1.259712 - 1) = 24000 * 0.259712 = 6233.088.

Multiple choice

At a certain simple rate of interest, a given sum amounts to Rs. 13,920 in 3 years, and to Rs. 18,960 in 6 years and 6 months. If the same given sum had been invested for 2 years at the same rate as before but with interest compounded every 6 months, then the total interest earned, in rupees, would have been nearest to

  1. 3,096

  2. 3,221

  3. 3,180

  4. 3,150
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Simple interest for 3.5 years (6.5 - 3) is 18960 - 13920 = 5040. Annual interest = 5040 / 3.5 = 1440. Principal = 13920 - 3*1440 = 9600. Rate = (1440/9600) * 100 = 15%. Compounded half-yearly for 2 years (4 periods) at 7.5% per period: Amount = 9600 * (1.075)^4 = 12821. Interest = 12821 - 9600 = 3221.