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

A certain investment scheme A offers interest rate of 10% in the first year, 15% in the second year and 20% in the third year compounded annually. Another investment scheme B offers 12% rate of interest compounded annually. Ram invests Rs. 2000 in investment scheme A and Rs. 800 in investment scheme B. What percent more interest is earned by Ram through investment in scheme A as compared to scheme B at the end of three years?

  1. 219.75%

  2. 217.95%

  3. 217.19%

  4. 216.31%

  5. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Multiple choice

If compound interest on a certain amount at a rate of 16% at the end of two years is 50% more than the simple interest on the same amount at the end of two years, then find the rate of interest offered in case of simple interest.

  1. 9.75%

  2. 10.45%

  3. 11.52%

  4. 12.25%

  5. 13.75%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

CI = P(1+r/100)^2 - P. SI = P*R*2/100. CI = 1.5 * SI. P((1+0.16)^2 - 1) = 1.5 * (P*R*2/100). (1.16^2 - 1) = 0.03R. 1.3456 - 1 = 0.03R. 0.3456 = 0.03R. R = 11.52.

Multiple choice

Samrat invests Rs. 10,250 in an investment scheme offering 12% p.a. compounded quarterly and Rs. 12,250 in another scheme offering 16% p.a. compounded quarterly. What will be the difference between the interests received by Samrat from both investment schemes after a year?

  1. Rs. 751

  2. Rs. 795

  3. Rs. 1068

  4. Rs. 1120

  5. Rs. 2060
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Scheme 1: 10250 at 12% p.a. compounded quarterly (3% per quarter) for 4 quarters. Interest = 10250 * (1.03^4 - 1) = 10250 * 0.12550881 = 1286.46. Scheme 2: 12250 at 16% p.a. compounded quarterly (4% per quarter) for 4 quarters. Interest = 12250 * (1.04^4 - 1) = 12250 * 0.16985856 = 2080.77. Difference = 2080.77 - 1286.46 = 794.31, which rounds to 795.

Multiple choice

ABC payment bank offers an investment scheme 'Yojana' to its customers at simple interest in which the investment of the customers gets doubled in 8 years. In another investment scheme 'Prayas' offered by bank, the rate of interest is same as that in 'Yojana' but the scheme offers interest compounded annually. What percentage return will be received by a customer if he invests in investment scheme 'Prayas' for two years?

  1. 22.51%

  2. 26.56%

  3. 27.51%

  4. 28.15%

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

Simple interest doubling in 8 years means rate = 100/8 = 12.5%. For compound interest over 2 years at 12.5%, the amount is P*(1.125)^2 = 1.265625*P. The return is 26.56%.

Multiple choice

If compound interest received on a certain amount in the 3rd year is Rs. 12,100, what will be the compound interest (in Rs.) for the 4th year on the same amount given that the rate of interest is 9%?

  1. 17,080

  2. 15,669

  3. 13,189

  4. 14,376
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Compound interest for the 3rd year is P * (1+r)^2 * r. Given 12100 = P * (1.09)^2 * 0.09. The interest for the 4th year is P * (1+r)^3 * r. This is equivalent to (Interest for 3rd year) * (1+r) = 12100 * 1.09 = 13189.

Multiple choice

In 2 years, at simple interest, the principal increases by 8%. What will be the compound interest earned (in Rs.) on Rs. 10 lakh in 2 years at the same rate?

  1. 86,000

  2. 81,600

  3. 90,000

  4. 94,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Since the principal increases by 8% in 2 years under simple interest, the annual interest rate is 4%. Applying this 4% annual rate to a principal of Rs. 10 lakh compounded annually for 2 years results in an effective interest of 8.16%. Calculating 8.16% of Rs. 10 lakh gives Rs. 81,600.

Multiple choice

A and B borrow a total sum of Rs. 30000 from C at 4% p.a. for 5 years and 5% for 4 years, respectively. Find out the sum borrowed by A, if A's interest is double than that of B's interest.

  1. Rs. 10000

  2. Rs. 20000

  3. Rs. 18000

  4. Rs. 15000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let A borrow x, then B borrows 30000-x. Interest for A is (x*4*5)/100 = 0.2x. Interest for B is ((30000-x)*5*4)/100 = 0.2(30000-x). Given 0.2x = 2 * 0.2(30000-x), so x = 2(30000-x), 3x = 60000, x = 20000.

Multiple choice

If compound interest received on a certain amount in the 2nd year is Rs. 250, what will be the compound interest (in Rs.) for the 3rd year on the same amount at 12% rate of interest?

  1. 250

  2. 300

  3. 280

  4. 270

  5. 290
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Compound interest for the 3rd year is the amount at the end of the 2nd year multiplied by the interest rate. If the 2nd year interest is 250, the principal for the 3rd year is the original principal plus the 1st year interest. However, a simpler way is to note that interest in year n+1 is (1+r) times interest in year n. Thus, 250 * 1.12 = 280.

Multiple choice

Directions: In this question, you have to find out which of the following statements is/are sufficient for determining the answer of the given question. Find the sum. I. The sum is lent for 4 years. II. The sum is calculated based on SI. III. Interest earned at the sum is Rs. 56 more, if the rate of interest is increased by 2%.

  1. Only I and II

  2. Only I and III

  3. Only II and either I or III

  4. All I, II and III

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

To find the sum (Principal P), we need the relationship between interest, rate, and time. Statement III provides the interest difference when the rate changes, which allows us to set up an equation: (P * (R+2) * 4)/100 - (P * R * 4)/100 = 56. This simplifies to 8P/100 = 56, allowing us to solve for P. All three statements are necessary to define the parameters.