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 compound interest compounded half yearly for 1 year and the simple interest for 1 year on a certain sum of money lent out at 8% per annum is Rs. 64. What is the sum (in Rs)?

  1. 40,000

  2. 42,000

  3. 44,000

  4. 44,800

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

CI for 1 year compounded half-yearly at 8% = P * (1 + 0.04)^2 - P = P * (1.0816 - 1) = 0.0816P. SI for 1 year at 8% = 0.08P. Difference = 0.0016P = 64. P = 64 / 0.0016 = 40000.

Multiple choice

The amounts of simple interest and compound interest that can be earned on a certain sum in two years at the same rate are Rs. 4000 and Rs. 4180, respectively. What is the rate (per annum) of interest?

  1. 18%

  2. 4.5%

  3. 9%

  4. 12%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Simple interest for 2 years = 4000, so SI for 1 year = 2000. Compound interest for 2 years = 4180. The difference is the interest on the first year's interest: 4180 - 4000 = 180. Rate = (180 / 2000) * 100 = 9%.

Multiple choice

Mohan Lal, the money lender, lent equal amounts to Gabbar and Thakur, 2 daily wagers, in the village of Ramgarh. The money to Gabbar was lent on compound interest (compounded annually) and that to Thakur on simple interest, the rate of interest being the same. The difference between the interest for a period of 2 years is Rs. 20 and that for 3 years is Rs. 64. What was the amount lent to each?

  1. Rs. 200

  2. Rs. 400

  3. Rs. 500

  4. Cannot be determined
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let P be the principal and r be the rate. CI - SI for 2 years = P(r/100)^2 = 20. CI - SI for 3 years = P(r/100)^2 * (3 + r/100) = 64. Substituting the first into the second: 20 * (3 + r/100) = 64 => 3 + r/100 = 3.2 => r/100 = 0.2. Then P(0.2)^2 = 20 => P(0.04) = 20 => P = 500.

Multiple choice

Abdullah, the money lender, lends Rs. 2000 to Fahim, a cherry farmer, both residents of the village Baramullah. The rate of interest for the 1st year is r%, for the 2nd year is (r + 2)%, for the 3rd year is (r + 4)% so on and so forth. At the end of 5th year, the total simple interest incurred is Rs. 1500. What is the value of r?

  1. 10

  2. 11

  3. 12

  4. 13
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The interest is calculated as 2000 * (r/100 + (r+2)/100 + (r+4)/100 + (r+6)/100 + (r+8)/100) = 1500. This simplifies to 20 * (5r + 20) = 1500, so 5r + 20 = 75, 5r = 55, and r = 11.

Multiple choice

A, B and C invested amounts in the ratio 3 : 4 : 5, respectively. If the schemes offered compound interest at the rate of 20% per annum, 15% per annum and 10% per annum, respectively, then what will be the ratio of their amounts after 1 year?

  1. 3 : 15 : 25

  2. 6 : 6 : 5

  3. 36 : 46 : 55

  4. 12 : 23 : 11

  5. N/A
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Initial amounts are 3x, 4x, 5x. After 1 year with compound interest: A = 3x(1.20) = 3.6x, B = 4x(1.15) = 4.6x, C = 5x(1.10) = 5.5x. Ratio = 3.6 : 4.6 : 5.5 = 36 : 46 : 55.

Multiple choice

A bank offers 10% interest per annum and interest is compounded half yearly. A customer deposits Rs. 2,000 each on 1st January and 1st July of an year. At the end of the year, the amount he would have gained by way of interest is

  1. Rs. 240

  2. Rs. 310

  3. Rs. 305

  4. Rs. 300
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

First 2000 deposited Jan 1 earns interest for 12 months (2 halves) at 5% per half year: 2000 * (1.05)^2 - 2000 = 2000 * 1.1025 - 2000 = 205. Second 2000 deposited July 1 earns interest for 6 months (1 half) at 5%: 2000 * 1.05 - 2000 = 100. Total interest = 205 + 100 = 305.