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

An amount of Rs. 100,000 is invested in two types of shares. The first yields an interest of 9% per annum and the second yields 11% per annum. If the total interest at the end of one year is 9.75%, then the amount invested in each share respectively is

  1. Rs. 72,500 and Rs. 27,500

  2. Rs. 62,500 and Rs. 37,500

  3. Rs. 52,500 and Rs. 47,500

  4. Rs. 82,500 and Rs. 17,500

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

Let x be amount at 9%, 100000-x at 11%. 0.09x + 0.11(100000-x) = 0.0975 * 100000. 0.09x + 11000 - 0.11x = 9750. 0.02x = 1250. x = 62500. The other is 37500.

Multiple choice

A certain sum of money, lent at a certain rate of compound interest, grows to 1.69 times of its value in 2 years. If the same sum is lent at simple interest at the same rate, in how many years/months would it double itself?

  1. 4 years

  2. 40 months

  3. 3 years

  4. 30 months

  5. 38 months
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If a sum grows to 1.69 times in 2 years at compound interest, (1+r)^2 = 1.69, so 1+r = 1.3, meaning r = 30% per annum. For simple interest, the sum doubles when the interest equals the principal, so P = P * 0.30 * t, which gives t = 1/0.30 = 3.33 years. 0.33 years is 4 months, so 3 years and 4 months equals 40 months.

Multiple choice

In how much time will Rs. 25,60,000 invested at 5% p.a. fetch an interest of Rs. 2,65,761, the interest being compounded half-yearly?

  1. 4 years

  2. 3 years

  3. 2 years

  4. 1 year

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

Using the compound interest formula A = P(1 + r/n)^(nt), where A = 25,60,000 + 2,65,761 = 28,25,761, P = 25,60,000, r = 0.05, and n = 2 (half-yearly). Solving for t gives (1.025)^(2t) = 2825761/2560000 = 1.1038. Since 1.025^4 is approximately 1.1038, 2t = 4, so t = 2 years.