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

A man invested Rs.20000 with rate of interest 20% per annum. The interest was compounded half yearly for the first year and next year it was compounded yearly. What is the total interest earned in 2 years?

  1. Rs.9050

  2. Rs.9060

  3. Rs.9070

  4. Rs.9040

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

Year 1: Half-yearly compounding at 20% annual rate = 10% per half-year. Amount after 1 year = 20000 × 1.10 × 1.10 = Rs. 24200. Year 2: Yearly compounding at 20%. Final amount = 24200 × 1.20 = Rs. 29040. Total interest = 29040 - 20000 = Rs. 9040. Option D is correct.

Multiple choice

A sum of money doubles itself in 7 years at simple interest. In how many years it will become 4 times?

  1. 14

  2. 21

  3. 16

  4. 24

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

If a sum doubles in 7 years at simple interest, it means the interest earned in 7 years equals the principal. To become 4 times, we need interest equal to 3 times the principal. Since 7 years gives 1×principal as interest, we need 3 × 7 = 21 years to get 3×principal as interest. At 21 years, total amount = principal + 3×principal = 4×principal.

Multiple choice

Simple interest on a sum at 4% per annum for 2 years is Rs. 80. Find the compound interest on the same sum for the same time and same rate.
  1. $82.60$
  2. $84.60$
  3. $86.80$
  4. $81.60$
  5. $None of these$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Simple interest for 2 years at 4% is Rs. 80, so annual interest = Rs. 40. Principal = 40 / 0.04 = Rs. 1000. Compound interest for 2 years at 4%: Year 1 interest = 1000 × 0.04 = 40, Year 2 interest = (1000 + 40) × 0.04 = 41.60. Total CI = 40 + 41.60 = Rs. 81.60. This matches option D exactly.

Multiple choice

If Rs. 1000 is invested at 12% interest and the interest is compunded half-yearly. what will be total amount at the end of one year.

  1. Rs. 1120.00

  2. Rs. 1123.60

  3. Rs. 1126.20

  4. Rs. 1134.40
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For half-yearly compounding at 12% annual rate, we use the formula A = P(1 + r/2n)^2 where n=2. The half-yearly rate is 6%, so A = 1000 × (1.06)^2 = 1000 × 1.1236 = Rs. 1123.60. Option A assumes simple annual compounding, while C and D are calculation errors.

Multiple choice

The simple interest on a sum of money will be Rs.190 after 7 years. In the next 7 years principal becomes 3 times, what will be the total interest at the end of the 14th year?

  1. Rs. 720

  2. Rs. 760

  3. Rs. 740

  4. Rs. 730

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

Let principal be P and rate be R%. SI = P×R×7/100 = Rs 190, so P×R = 19000/7. After 7 years, new principal = 3P. Interest for next 7 years = 3P×R×7/100 = 3 × (P×R×7/100) = 3 × 190 = Rs 570. Total interest = 190 + 570 = Rs 760.

Multiple choice

A person takes a loan of Rs.10,000 partly from a bank at 8% per annum and remaining from another bank at 10% per annum. He pays a total interest of Rs.950 per annum. Amount of loan taken from the first bank (in Rs.) is:

  1. Rs. 3200

  2. Rs. 2500

  3. Rs. 2000

  4. Rs. 1600
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let x be the amount from the first bank at 8%, so (10000-x) is from the second bank at 10%. Total interest: 0.08x + 0.10(10000-x) = 950. Solving: 0.08x + 1000 - 0.10x = 950, so -0.02x = -50, giving x = 2500. This is a standard mixture problem: set up variables for each component and equate the total interest.

Multiple choice

What will be the compound interest accrued on a sum of Rs. 30,000 at the rate of 8% per annum in 2 years?

  1. Rs. 4992

  2. Rs. 5092

  3. Rs. 5062

  4. Rs. 5600

  5. Rs. 6400
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Use compound interest formula: A = P(1 + r)². A = 30,000 × (1.08)² = 30,000 × 1.1664 = 34,992. Compound interest = 34,992 - 30,000 = 4,992. Alternatively, year 1: 30,000 × 0.08 = 2,400 (new principal 32,400); year 2: 32,400 × 0.08 = 2,592; total CI = 2,400 + 2,592 = 4,992.

Multiple choice

The difference between the compound interest and simple interest at the rate of 10% per annum at the end of two years is Rs. 496.20. If the compound interest is compounded every six months, what is the sum?

  1. Rs. 30000

  2. Rs. 32000

  3. Rs. 34800

  4. Rs. 36700

  5. Cannot be determined
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For compound interest compounded half-yearly at 10% annual rate, the half-yearly rate is 5% per period. In 2 years, there are 4 periods. Let P be the principal. CI = P(1 + 5/100)^4 - P = P(1.05)^4 - P = P(1.2155) - P = 0.2155P. SI = P × 10 × 2/100 = 0.2P. Difference CI - SI = 0.2155P - 0.2P = 0.0155P = 496.20. Therefore P = 496.20/0.0155 ≈ Rs. 32000.