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

Mohan borrowed Rs. 720 from Amit at 8% p.a. simple interest for 2 years. He then added some more money to the borrowed sum and lent it to his friend Rahul for the same period of time at 10% p.a. simple interest. If Mohan gains Rs. 77.50 in the whole transaction, then how much money did he add from his side?

  1. Rs. 298

  2. Rs. 243.50

  3. Rs. 198.50

  4. Rs. 156

  5. Rs. 121
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Mohan's interest paid is 720 * 0.08 * 2 = 115.2. Let X be the added amount. Total principal is 720 + X. Interest earned is (720 + X) * 0.10 * 2 = 144 + 0.2X. Profit is (144 + 0.2X) - 115.2 = 77.5. Solving 28.8 + 0.2X = 77.5 gives 0.2X = 48.7, so X = 243.5.

Multiple choice

A sum of Rs. 18,000 is lent at 10% p.a. compound interest, compounded annually. What is the difference between the compound interest for 3rd year and 4th year?

  1. Rs. 220.60

  2. Rs. 217.80

  3. Rs. 221.80

  4. Rs. 215.40
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Amount after 2 years = 18000 * (1.1)^2 = 21780. Interest for 3rd year = 21780 * 0.10 = 2178. Amount after 3 years = 21780 * 1.1 = 23958. Interest for 4th year = 23958 * 0.10 = 2395.8. Difference = 2395.8 - 2178 = 217.80.

Multiple choice

A sum of Rs. 8,400 amounts to Rs. 11,046 at 8.75% p.a. simple interest in a certain time. What is the simple interest on the sum of Rs. 9,600 at the same rate for the same time?

  1. Rs. 2,990

  2. Rs. 3,012

  3. Rs. 2,686

  4. Rs. 3,024
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Interest on 8400 is 11046 - 8400 = 2646. Rate and time are same for both. Simple interest is proportional to the principal. (SI1 / P1) = (SI2 / P2). 2646 / 8400 = SI2 / 9600. SI2 = (2646 * 9600) / 8400 = 3024.

Multiple choice

A person divided a sum of Rs. 17,200 into three parts and invested these parts at 5%, 6% and 9% per annum simple interest. At the end of two years, he got the same interest on each part of money. What was the amount of money invested at 9%?

  1. Rs. 3,200

  2. Rs. 4,000

  3. Rs. 4,800

  4. Rs. 5,000
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let parts be P1, P2, P3. Interest: P1*0.05*2 = P2*0.06*2 = P3*0.09*2. So 0.05P1 = 0.06P2 = 0.09P3. P1 = 1.2P2, P3 = (0.06/0.09)P2 = (2/3)P2. P1 + P2 + P3 = 17200. 1.2P2 + P2 + 0.666P2 = 17200. 2.866P2 = 17200. P2 = 6000. P3 = (2/3)*6000 = 4000.

Multiple choice

Rahul borrowed Rs. 1,00,000 at 8% p.a. interest compounded annually. How much should he repay at the end of the first year (in Rs.), so that by repaying Rs. 54,000 at the end of the second year, he can clear the loan?

  1. 46,000

  2. 54,000

  3. 58,000

  4. 50,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let X be the amount paid at the end of year 1. Balance after year 1 = 100000 * 1.08 - X. Interest on this balance for year 2 = (108000 - X) * 0.08. Total paid at end of year 2 = (108000 - X) * 1.08 = 54000. 108000 - X = 54000 / 1.08 = 50000. X = 108000 - 50000 = 58000.

Multiple choice

Directions: Read the given information and choose the correct answer. What is the rate of interest? Statement I: The initial amount doubles in 2 years at simple interest. Statement II: The simple interest at the end of 5 years is Rs. 2,000.

  1. I only

  2. II only

  3. III only

  4. Either I or II

  5. Either II or III
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Statement I: P doubles in 2 years at SI means SI = P, so P = P*R*2/100 => R = 50%. Statement II: SI = 2000 in 5 years, but P is unknown, so R cannot be found. Only I is sufficient.