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

The difference between the simple interest and the compound interest on a certain sum of money at 4% per annum in 2 years in Rs. 10. What is the sum?

  1. Rs. 5,000

  2. Rs. 6,000

  3. Rs. 6,250

  4. Rs. 7,500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For a 2-year period, the difference between compound interest and simple interest is given by the formula D = P * (r/100)^2. Plugging in D = 10 and r = 4, we get 10 = P * (4/100)^2, which is 10 = P * (1/25)^2. Thus, 10 = P/625, so P = 6250.

Multiple choice

The compound interest for two years is Rs. 525 on a certain sum of money at 10% annual interest rate. If the same amount of money is lent for double the time and at half the annual rate of interest, then what will be the simple interest?

  1. Rs. 250

  2. Rs. 300

  3. Rs. 400

  4. Rs. 500

  5. Rs. 550
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For CI: 525 = P * ((1 + 0.1)^2 - 1) = P * (1.21 - 1) = 0.21P. P = 525 / 0.21 = 2500. For SI: P = 2500, T = 4 years (double), R = 5% (half). SI = (2500 * 4 * 5) / 100 = 500.

Multiple choice

An amount was lent for one year at the rate of 10% per annum, compounding annually. Had the compounding been done half yearly, the interest would have increased by 80. What was the amount (in Rs.) lent?

  1. Rs. 16,000

  2. Rs. 32,000

  3. Rs. 48,000

  4. Rs. 64,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let P be the amount. Annual interest = 0.1P. Half-yearly interest = P * (1 + 0.05)^2 - P = 1.1025P - P = 0.1025P. Difference = 0.0025P = 80. P = 80 / 0.0025 = 32000.