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 investement and financial planning banking compound interest comparing quantity maths

What sun will become Rs 9826 in 18 months if the rate of interest is $\displaystyle 1\frac{1}{2}$% per annum and the interest is compounded half-yearly?

  1. Rs 9466.54

  2. Rs 9646.54

  3. Rs 9566.54

  4. Rs 9456.54
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

r $ = 2\dfrac {1}{2} $ % $ = \dfrac {5}{2} $ % n $ = 18 $ months $ = \dfrac {3}{2} $ years

When the interest is compounded half yearly,

$ A=P\left( 1+\dfrac { r }{ 2\times 100 }  \right) ^{ n\times 2 } $

$ => 9826 = P\left( 1+\dfrac { \dfrac {5}{2} }{ 2\times 100 }  \right) ^{ \dfrac {3}{2}\times 2 } $
$ => 9826 = P( \dfrac {81}{80}) ^{ 3 } $
$ => P =Rs 9466.54 $

Multiple choice adjustment of partners capital and death of a partner retirement/ death of a partner elements of accounts

X, Y and Z are partners in a firm. At the time of division of profit for the year there was dispute among the partners. Profits before interest on partners capital and loan was Rs. 6,000 and.Y determined interest @ 24% p.a. on his loan of Rs. 80,000. There was no agreement on this point. Calculate the amount payable to X, Y and Z respectively.

  1. Rs. 2,000 to each partner.

  2. Loss of Rs. 4,400 for X and Z and Y will take home Rs. 14,800.

  3. Rs. 400 for X, Rs. 5,200 for Y and Rs. 400 for Z.

  4. Rs. 2;400 to each partner.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In the absence of partnership deed, no interest on capital is provided. Interest on loan is calculated at 6%. Interest On loan at 6% will be 4800 Rs. Remaining 1200 Rs. will be distributed equally among partners 400 Rs. to each partner. Share of X and Z will be 400 Rs. and share of Y will be 400+ 4800(interest on loan) = 5200 Rs.

Multiple choice business maths commission,brokerage and discount advantages of bill of exchange definition, characteristics and parties of bills of exchange simple transactions related to bills of exchange

A money lender finds that due to reducing the interest rate decrease from $8\%$ to $7\dfrac{3}{4}\%$, his yearly income diminishes by Rs. 61.50. His capital is 

  1. Rs. 22400

  2. Rs. 23800

  3. Rs. 24600

  4. Rs. 26000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Difference in rate$=\left(8-7\dfrac{3}{4}\right)\%=\dfrac{1}{4}\%$
Let the capital be rate Rs.$x$
$\therefore  \dfrac{1}{4}\%$ of $x=61.50$
$\therefore x = 61.50\times 100\times 4$
     Rs$=24600$
Multiple choice installments banking business and commercial activities economics maths

What annual instalment will discharge a debt of Rs. $2710$ due in $4$ years at $7\%$ simple interest?

  1. Rs. $1000$
  2. Rs. $613$
  3. Rs. $225$
  4. Rs. $150$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the annual installment be $x$

Now, $ x$ accumulates an interest of $7.1$ every year
$\implies$
$x$ deposited in first year becomes $1.21x$ in next $3$ years
$x$ deposited in second year becomes $1.11x$ in next $2$ years
$x$ deposited in first year becomes $1.07x$ in next $4$ years
$\implies1.21x+1.41x+1.07x+x=2710\ \implies 4.92x=2710\ \implies x=Rs.613$

Multiple choice installments banking business and commercial activities economics maths

Volkswagen decides to sell its best-selling car under following different schemes:

Scheme Selling Price InitialPayment ProcessingFee Rate ofInterest Duration
$80\%$ Finance Rs. $4{,}00{,}000$ $20\%$ $0.5\%$ $10\%$ $2$ years
$100\%$ Finance Rs. $4{,}00{,}000$ $0\%$ $1\%$ $12.5\%$ $1$ years
$0\%$ Interest Rs. $4{,}00{,}000$ $3$ EMIsin advance $1\%$ $0\%$ $2$ years


What is the total amount that need to be paid in the $100\%$ Finance Scheme?

  1. Rs. $4{,}34{,}000$
  2. Rs. $4{,}67{,}000$
  3. Rs. $4{,}54{,}000$
  4. Rs. $4{,}27{,}000$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For $100\%$ finance scheme:


$\text{Processing fee=1% of 4,00,000=Rs. 4,000}$

$\text{Initial payments=0%=0}$

$SI=\dfrac{PRT}{100}=\dfrac{4,00,000\times 12.5\times 1}{100}=Rs.\ 50,000$

Hence, total amount that need to be paid is

$Rs.\ (4,00,000+50,000+4,000)=Rs.\ 4,54,000$

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

John, a partner in Modern Tours and Travels withdrew money during the year ending March 31, 2016 from his capital account, for his personal use. Calculate interest on drawings, if rate of interest is 9 per cent per annum.  If an amount of Rs. $3,000$ per month was withdrawn by him at the end of each month.

  1. Rs. $1,580$
  2. Rs. $2,355$
  3. Rs. $1,955$
  4. Rs. $1,485$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Using the average method:

Interest on Drawings = (3,000 x 12) x 9/100 x [(longest outstanding period + shortest outstanding period)/2]/12
= (3,000 x 12) x 9/100 x [(11 + 0)/2]/12
= (3,000 x 12) x 9/100 x (5.5/12)
= 1,485

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

N & Z are two partners. During the year N withdraws Rs. $37,000$ on $1-5-2012$ & Z withdraws Rs. $45,000$ on $15-8-2012$. Accounts are closed on $31-12-2012$. Rate of interest on drawings is $10\%$ p.a. Interest on drawing for two partner respectively will be.

  1. $2,775$ & $2,063$
  2. $2,063$ & $2,775$
  3. $2,467$ & $1,688$
  4. $1,688$ & $2,467$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Calculation of interest in drawings:
$N=37,000\times 10\%\times \dfrac{8}{12}=2,467$
$S=45,000\times 10\%\times \dfrac{4.5}{12}=1,688$.

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

If a fixed amount is withdrawn on the last day of every month of a calendar year, the interest on the total amount of drawings will be calculated for _________. 

  1. 4.5 months

  2. 5.5 months

  3. 6 months

  4. 6.5 months
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
If a fixed amount is withdrawn on last day of every month of the calendar year, the interest on the total amount of drawings will be calculated for 5.5 months. Average period will be calculated as:-
= Months left after first drawing + months left after last drawing 
 ------------------------------------------------------------------------------------------
                                                        2
= 11 + 0
-------------
        2
= 5.5 months.
Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

A Drawn Rs.1000 per month on the last day of every month. If the rate of interest is 5% p.a. then the total interest or drawings will be:

  1. Rs. 325

  2. Rs. 275

  3. Rs. 300

  4. Rs. 350
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Interest on drawing = Total drawings x rate of interest x average period/12
                                 = 1,000 x 12 x 5/100 x 5.5/12 (WN 1)
                                 = 12,000 x 5% x 5.5/12
                                 = RS-275.

Working note:-
Average period = Beginning period of use + end period of use
                             ------------------------------------------------------------------
                                                                2
                           = 11 + 0
                             --------
                                 2
                          = 5.5 
Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

Kamal and Vimal are partners in a firm. They share profits equally. Their monthly drawings are Rs 2,000 each. Interest on drawings is to be charged at 10% p.a. Calculate interest on Kamal and Vimal's drawings for the year 2016, assuming that amount is withdrawn in the beginning of every month.

  1. Rs 1,300 and Rs 1,100

  2. Rs 1,200 and Rs 1,200

  3. Rs 1,100 and Rs 1,100

  4. Rs 1,300 and Rs 1,300
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Interest on drawings = Amount withdrawn x rate x average period / 12
                                   = 2,000 x 12 x 10/100 x 6.5/12
                                   = 24,000 x 10/100 x 6.5/12
                                   = RS-1,300 for both Kamal and Vimal. 

Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

Ajay and Vijay are partners in a firm. They share profits in the ratio of 3:2. As per their partnership agreement, interest on drawings is to be charged @ 10% p.a. Their drawings during 2017 were Rs 24,000 and Rs 16,000, respectively. Calculate interest on drawings based on the assumption that the amounts were withdrawn evenly, throughout the year.

  1. Rs 1,200 and Rs 800

  2. Rs 1,500 and Rs 900

  3. Rs 1,800 and Rs 1,200

  4. Rs 1,000 and Rs 600
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
Interest on Drawings = Amount withdrawn x rate of interest x 6/12 (evenly)
AJAY:-
= 24,000 x 10/100 x 6/12
= RS-1,200.

VIJAY:-
= 16,000 x 10/100 x 6/12
= RS-800.
Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

Harish is a partner in a firm. He withdrew the following amounts during the year 2017:
May 1 -                      4,000
August 1 -                10,000
September 30 -         4,000
January 31 -            12,000
March 31 -                 4,000

Interest on drawings is to be charged @ 7.5% p.a. Calculate the amount of interest to be charged on Harish's drawing for the year ending March 31, 2018.  

  1. Rs. 1,100

  2. Rs. 1,125

  3. Rs. 1,075

  4. Rs. 1,200
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
Date             No. of months till     Workings                                                   Total
May 1                    11 months       4,000 x 11/12 x 7.5/12                               RS-275
August 1                8 months       10,000 x 8/12 x 7.5/12                             RS-500
September 30      6 months       4,000 x 6/12 x 7.5/12                              RS-150
January 31            2 months       12,000 x 2/12 x 7.5/12                             RS-150
March 31                    0                                 0                                                   0
Total interest                                                                                            = RS-1,075
Multiple choice book keeping and accountancy adjustments drawing account of partners interest on drawings interest on partner's drawings and capital

Kiran, a partner in a firm, withdrew money from his capital account during the year ended 31, March 2017. If the amounts withdrawn were: Rs. $12,000$ on June 01, 2015, Rs. $8,000$; on August 31, 2015, Rs. $3,000$; on September 30, 2015, Rs. $7,000$, on November 30, 2015, and Rs. $6,000$ on January 31, 2016. Calculate interest in drawings, if rate of interest is $9$ per cent per annum.

  1. Rs. $1,800$
  2. Rs. $2,400$
  3. Rs. $1,755$
  4. Rs. $1,585$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
 S.No.  Amount withdrawn Date of drawing   No. of months till 31.12.2016 Product 
 1.  12,000  01.06.2015  10  1,20,000
 2.  8,000  31.08.2015  7  56,000
 3. 3,000   30.09.2015  6  18,000
 4.  7,000  30.11.02015  4  28,000
 5.  6,000  31.01.2016  2  12,000
     Total Product    2,34,000
     Interest on Drawings   Total Product x Rate of Interest x Common Factor
         2,34,000x 9% x 1/12 
         1,755
        (Rate of Interest = 9%)
        (Common factor = 1/12)
Multiple choice introduction to ratio and percentages comparing quantities maths

The difference between simple interest and compound interest on a certain sum of money for 3 years at 5% per annum is Rs. 122. Find the sum

  1. Rs. 12,200

  2. Rs. 15,000

  3. Rs. 16,500

  4. Rs. 16,000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Suppose $sum=P$
Given $CI-SI=Rs. 122$
$P\left (1+\frac {5}{100}\right )^3-P-\left (\frac {P\times 5\times 3}{100}\right )=122$
$P\left (\frac {105^3}{100^3}-1-\frac {15}{100}\right )=122$
$P\left (\frac {7,625}{100^3}\right )=122$
$P=\frac {122\times 100^3}{7,625}=Rs. 16,000$

Multiple choice introduction to ratio and percentages comparing quantities maths

A person invested Rs 1,600 for 3 years and Rs 1,100 for 4 years at the same rate of simple interest. The total interest from these investments was Rs 506. Find the rate percent per annum

  1. 5%
  2. $5\frac {1}{2}$%

  3. 6%
  4. $6\frac {1}{2}$%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

$P _1=1,600, t _1=3$
$P _2=1,1000, t _2=4$
$SI _1+SI _2=506$
or $\frac {1,600\times 3\times r}{100}+\frac {1,100\times 4\times r}{100}=506$
or $r(4,800+4,400)=506\times 100$
or $r=\frac {506\times 100}{92,000}=5.5$%