Simple and Compound Interest Questions

Multiple choice
  1. Rs. 16,000

  2. Rs. 20,000

  3. Rs. 36,000

  4. Rs. 24,000

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The increase in interest is due to the 3% higher rate over 2 years, which corresponds to an extra 6% of the principal X. Since this extra interest is Rs. 300, we have 0.06 * X = 300, which gives X = Rs. 5,000. Therefore, the value of 4X is 4 * 5,000 = Rs. 20,000.

Multiple choice
  1. Rs. 2300

  2. Rs. 2350.50

  3. Rs. 2400

  4. Rs. 2500

  5. Rs. 2550.50

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For compound interest, the amount after 2 years is A2 = P(1+r)^2 and after 1 year is A1 = P(1+r). Thus, (1+r) = A2/A1 = 2704/2600 = 1.04. P = A1 / 1.04 = 2600 / 1.04 = 2500.

Multiple choice
  1. P = 12,000, R = 30%

  2. P = 13,000, R = 20%

  3. P = 12,000, R = 25%

  4. P = 10,000, R = 35%

  5. P = 15,000, R = 35%

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For 2 years, Simple Interest (SI) = 2*P*R = 7200, so PR = 3600. Compound Interest (CI) = P((1+R)^2 - 1) = P(2R + R^2) = 2PR + PR^2 = 8280. Substituting 2PR = 7200, we get 7200 + PR^2 = 8280, so PR^2 = 1080. Dividing PR^2 by PR gives R = 1080/3600 = 0.3 or 30%. Then P = 3600/0.3 = 12,000.

Multiple choice
  1. Rs. 832.20

  2. Rs. 1100

  3. Rs. 900

  4. Rs. 1050

  5. None of these

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Let x be the annual installment. The debt is discharged by the sum of the installments plus the interest on each. The first installment (paid at end of year 1) earns interest for 4 years, the second for 3, etc. Total = 5x + x * 0.09 * (4+3+2+1) = 5x + x * 0.09 * 10 = 5x + 0.9x = 5.9x. 5.9x = 4910. x = 4910 / 5.9 = 832.20.

Multiple choice
  1. Rs. 8,800

  2. Rs. 9,040

  3. Rs. 8,040

  4. Rs. 9,800

  5. None of these

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Year 1: 20000 at 20% compounded half-yearly (10% per 6 months). Amount = 20000 * (1.1)^2 = 24200. Interest = 4200. Year 2: 24200 at 20% compounded yearly. Amount = 24200 * 1.2 = 29040. Interest = 29040 - 24200 = 4840. Total interest = 4200 + 4840 = 9040.