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

John borrowed Rs. 3000 from Mohan at a rate of 10% p.a simple interest for 3 years. At the end of the year, he paid the interest for that year and part of the loan, altogether Rs. 800. Similarly, he paid Rs. 800 at the end of the 2nd year. What sum must he pay now to clear off the debt?

  1. Rs. 2145

  2. Rs. 2060

  3. Rs. 2045

  4. Rs. 2100
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Year 1: Interest = 3000 * 0.10 = 300. Payment 800 covers 300 interest and 500 principal. Remaining principal = 2500. Year 2: Interest = 2500 * 0.10 = 250. Payment 800 covers 250 interest and 550 principal. Remaining principal = 1950. Year 3: Interest = 1950 * 0.10 = 195. Total to pay = 1950 + 195 = 2145.

Multiple choice

A lends Rs. 2500 to B and a certain sum to C at the same time at 7% p.a. simple interest. If after 4 years, A altogether receives Rs. 1120 as interest from both B and C, what is the sum lent to C?

  1. Rs. 700

  2. Rs. 1500

  3. Rs. 4000

  4. Rs. 6500
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the sum lent to C be x. The interest from B is (2500 * 7 * 4) / 100 = 700. The total interest is 1120, so the interest from C is 1120 - 700 = 420. Using the formula 420 = (x * 7 * 4) / 100, we get 420 = 0.28x, which results in x = 1500.

Multiple choice

A tractor is sold for Rs. 4,50,000 or Rs. 1,50,000 cash down together with ten equal monthly instalments of Rs. 32,000 each. Find the rate of interest charged under the investment plan.

  1. 3.38%

  2. 3.44%

  3. 4.38%

  4. 4.44%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The cash price is 450,000. The installment plan is 150,000 down plus 10 payments of 32,000, totaling 470,000. The interest is 20,000 on the declining balance, which calculates to approximately 4.44% using the standard annuity formula for monthly installments.

Multiple choice

Three persons, Amar, Akbar and Anthony, invested different amounts in a fixed deposit scheme for one year at the rate of 12% per annum and earned a total interest of Rs. 3240 at the end of the year. If the amount invested by Akbar was Rs. 5000 more than the amount invested by Amar and the amount invested by Anthony was Rs. 2000 more than the amount invested by Akbar, then what was the amount invested by Akbar?

  1. Rs. 12,000

  2. Rs. 10,000

  3. Rs. 7000

  4. Rs. 5000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let Amar's investment be x. Then Akbar's is x + 5000 and Anthony's is (x + 5000) + 2000 = x + 7000. Total interest is 3,240 at 12% for 1 year, so total principal is 3,240 / 0.12 = 27,000. Summing the investments: x + (x + 5000) + (x + 7000) = 27,000, so 3x + 12,000 = 27,000, 3x = 15,000, x = 5,000. Akbar's investment is 5,000 + 5,000 = 10,000.

Multiple choice

A financier took Rs. 80,000 on loan from a bank at 20% simple interest and gave it to another person at the same rate, but compounded the interest twice a year. What would be his profit at the end of the year?

  1. Rs. 600

  2. Rs. 800

  3. Rs. 1600

  4. Rs. 1800

  5. Rs. 400
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Interest paid = 80,000 * 0.20 = 16,000. Interest received (compounded semi-annually) = 80,000 * (1 + 0.10)^2 - 80,000 = 80,000 * 1.21 - 80,000 = 96,800 - 80,000 = 16,800. Profit = 16,800 - 16,000 = 800.

Multiple choice

Mr. A deposited an amount of Rs. 13,500 in two different banks at simple interest rates of 14% p.a. and 12% p.a, respectively. If the total amount of simple interest earned in 2 years was Rs. 3500, what was the amount deposited in the second bank?

  1. Rs. 6400

  2. Rs. 6500

  3. Rs. 7000

  4. Rs. 7500

  5. Rs. 8000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let x be amount at 14%, (13500-x) at 12%. Interest = (x * 14 * 2)/100 + ((13500-x) * 12 * 2)/100 = 3500. 0.28x + 0.24(13500-x) = 3500. 0.04x + 3240 = 3500. 0.04x = 260. x = 6500. Amount in second bank = 13500 - 6500 = 7000.

Multiple choice

A sum of Rs. 1230 is borrowed at 5% compound interest for 2 years on the condition that it is refunded in 2 equal installments - one at the end of the first year and the other at the end of the second. Find the amount of each installment.

  1. Rs. 637.50

  2. Rs. 661.50

  3. Rs. 655.50

  4. Rs. 650.61

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

Let x be the installment. 1230 = x/(1.05) + x/(1.05)^2. 1230 = x(1/1.05 + 1/1.1025) = x(1.05 + 1)/1.1025 = x(2.05/1.1025). x = 1230 * 1.1025 / 2.05 = 661.50.

Multiple choice

The compound interest and simple interest on a certain sum for 2 years, respectively, are Rs. 41 and Rs. 40. Find the sum and the rate.

  1. Rs.400, 5%

  2. Rs.450, 3%

  3. Rs. 500, 4%

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

Simple interest for 2 years is 40, so SI for 1 year is 20. Compound interest for 2 years is 41, so the extra 1 is the interest on the first year's interest (20). Rate = (1/20) * 100 = 5%. Since 20 is 5% of the sum, Sum = 20 / 0.05 = 400.