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

Ravi lends a certain sum of money at simple interest and compound interest. The ratio of the difference between compound interest and simple interest for 3 years to that for 2 years is 25 : 8. What is the rate of interest per annum?

  1. 12.5%

  2. 10.5%

  3. 8.5%

  4. 6.5%

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

The difference between CI and SI for 2 years is P(r/100)^2. For 3 years, it is P(r/100)^2 * (3 + r/100). The ratio of these differences is 1 : (3 + r/100). Given the ratio is 8 : 25, we have 8 / 25 = 1 / (3 + r/100). Thus, 3 + r/100 = 25/8 = 3.125, so r/100 = 0.125, which means r = 12.5%.

Multiple choice

Directions: Study the given information carefully to answer the question that follows: Two friends A and B invested Rs. 20,000 and Rs. 15,000, respectively for a period of 3 years. A put the money in a fixed deposit at a compound rate of 8.5% p.a. while B put his money in mutual fund which gave him 12.5% compounded annually. Find the approximate amount of interest earned by A.

  1. Rs. 5546

  2. Rs. 5564

  3. Rs. 5654

  4. Rs. 5645

  5. Rs. 5445
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest for A = 20000 * ((1 + 0.085)^3 - 1) = 20000 * (1.277289 - 1) = 20000 * 0.277289 = 5545.78.

Multiple choice

Directions: Study the given information carefully to answer the question that follows: Two friends A and B invested Rs. 20,000 and Rs. 15,000, respectively for a period of 3 years. A put the money in a fixed deposit at a compound rate of 8.5% p.a. while B put his money in mutual fund which gave him 12.5% compounded annually. What was the total amount received by B after 3 years if he had to pay 1% to his Mutual Fund Adviser as a commission on the interest earned by him?

  1. Rs. 21,193.85

  2. Rs. 21,239.85

  3. Rs. 22,193.85

  4. Rs. 21,293.85

  5. Rs. 22,119.85
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

B's investment = 15000, rate = 12.5%, time = 3 years. Amount = 15000 * (1.125)^3 = 15000 * 1.423828 = 21357.42. Interest = 21357.42 - 15000 = 6357.42. Commission = 1% of 6357.42 = 63.57. Total amount = 21357.42 - 63.57 = 21293.85.

Multiple choice

Two equal sums of money were invested at simple interest, one at 3% and the other at 3.5%. At the end of 3 years, the interest received from the latter investment exceeded the one that was received from the former investment by Rs. 120. Find the sum invested.

  1. Rs. 8,000

  2. Rs. 8,050

  3. Rs. 9,000

  4. Rs. 9,500

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

Let sum be P. Interest 1 = P * 0.03 * 3 = 0.09P. Interest 2 = P * 0.035 * 3 = 0.105P. Difference = 0.015P = 120. P = 120 / 0.015 = 8,000.

Multiple choice

A man gets a simple interest of Rs. 1,000 on a certain principal at the rate of 5% p. a. in 4 years. What compound interest will the man get on twice the principal in two years at the same rate?

  1. Rs. 1,050

  2. Rs. 1,005

  3. Rs. 11,025

  4. Rs. 1,025
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

SI = (P * R * T) / 100 => 1000 = (P * 5 * 4) / 100 => 1000 = P * 0.2 => P = 5000. New Principal = 2 * 5000 = 10000. Compound Interest for 2 years at 5% = 10000 * (1.05^2 - 1) = 10000 * (1.1025 - 1) = 10000 * 0.1025 = 1025.

Multiple choice

Ankit invested Rs. 1500 in two different banks for two years. Rate of investment per annum was 5% in the first bank and 6% in the second bank. He got Rs. 160 as the total interest. Find the respective amounts given at 5% and 6% per annum simple interest.

  1. Rs. 950 and Rs. 550

  2. Rs. 1000 and Rs. 500

  3. Rs. 900 and Rs. 600

  4. Rs. 800 and Rs. 700
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be the amount at 5% and (1500-x) be the amount at 6%. Interest = (x*0.05*2) + ((1500-x)*0.06*2) = 160. 0.1x + 180 - 0.12x = 160. -0.02x = -20. x = 1000. The amounts are 1000 and 500.