Top 100+ Compound Interest Questions and Answers - 1

 Question: 1

What will be the difference between simple and compound interest @ 10% per annum on a sum of Rs. 1000 after 4 years?

(A) Rs. 31

(B) Rs. 40.40

(C) Rs. 64.10

(D) Rs. 74.20

View Answer

Ans: C

S.I. = Rs. (

1000×10×4

100

) = Rs. 400.

C.I. = Rs. [1000×(1+

10

100

)4−1000] = Rs. 464.10.

Difference = Rs. (464.10 – 400) = 64.10.

Question: 2

The simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is

(A) Rs. 1550

(B) Rs. 1650

(C) Rs. 1700

(D) Rs. 1750

View Answer

Ans: D

C.I. = Rs. [4000×(1+

10

100

)2−4000]

      = Rs. (4000×

11

10

×

11

10

–4000) = Rs. 840.

∴ Sum = Rs. (

420×100

3×8

) = Rs. 1750.

Question: 3

The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is

(A) 6%

(B) 6.07%

(C) 6.09%

(D) 6.10%

View Answer

Ans: C

Amount of Rs. 100 for 1 year when compounded half yearly

= Rs. [100×(1+

3

100

)2] = Rs. 106.09.

∴ Effective rate = (106.09 – 100)% = 6.09%.

Question: 4

The difference between simple interest and compound interest on Rs. 1200 for one year at 10% per annum reckoned half yearly is

(A) Rs. 3

(B) Rs. 3.25

(C) Rs. 3.75

(D) Rs. 4

View Answer

Ans: A

S.I. = Rs. (

1200×10×1

100

) = Rs. 120.

C.I. = Rs. [1200×(1+

5

100

)2−1200] = Rs. 123.

Difference = Rs. (123 – 120) = Rs. 3.

Question: 5

What will be the compound interest accrued on an amount of Rs. 10000 % 20 p.c.p.a. in 2 years if the interest is compound half yearly?

(A) Rs. 4600

(B) Rs. 4641

(C) Rs. 4680

(D) Rs. 4820

View Answer

Ans: B

P = Rs. 10000, R = 20%, p.a. = 10% per half year.

T = 2 years = 4 half years.

Amount = Rs. [10000 × (1+

10

100

)4]

= Rs. (10000×

11

10

×

11

10

×

11

10

×

11]

10

) = Rs. 14641.

∴ C.I. = Rs. (14641 – 10000) = Rs. 4641.

Question: 6

On a sum of money, the simple interest for 2 years is Rs. 660, while the compound interest is Rs. 696.30, the rate of interest being the same in both the cases. The rate of interest is

(A) 10%

(B) 11%

(C) 12%

(D) 15%

View Answer

Ans: B

Difference in C.I. and S.I. for 2 years = Rs. (696.30 – 660) = Rs. 36.30.

S.I. for one year = Rs. 330

∴ S.I. on Rs. 330 for 1 year = Rs. 36.30.

∴ Rate = (

100×36.30

330×1

)% = 11%.

Question: 7

Sam invested Rs. 15,000 @ 10% per annum for one year. If the interest is compounded half yearly, then the amount received by Sam at the end of the year will be

(A) Rs. 16,525.50

(B) Rs. 16,537.50

(C) Rs. 18,150

(D) Rs. 16,500

View Answer

Ans: B

P = Rs. 15000; R = 10% p.a. = 5% per half year, T = 1 year = 2 half years.

Amount = Rs. [15000×(1+

5

100

)2]

= Rs. (15000×

21

20

×

21

20

) = Rs. 16537.50.

Question: 8

Albert invested an amount o Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit?

(A) Rs. 8500

(B) Rs. 8600

(C) Rs. 8620

(D) Rs. 8800

View Answer

Ans: D

Amount = Rs. [8000×(1+

5

100

)2]

= Rs. (8000×

21

20

×

21

20

) = Rs. 8800.

Question: 9

A man gets a simple interest of Rs. 1000 on a certain principal at the rate of 5 p.c.p.a. in 4 years. What compound interest will the man get on twice the principal in 2 years at the same rate?

(A) Rs. 1005

(B) Rs. 1025

(C) Rs. 10125

(D) Rs. 11025

View Answer

Ans: B

Principal = Rs. (

100×1000

5×4

) = Rs. 5000.

Now, P = Rs. 10000, T = 2 years, R = 5%.

Amount = Rs. [10000×(1+

5

100

)2]

= Rs. (10000×

21

20

×

21

20

) = Rs. 11025.

∴ C.I. = Rs. (11025 – 10000) = Rs. 1025.

Question: 10

What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12 p.c.p.a?

(A) Rs. 9720

(B) Rs. 10123.20

(C) Rs. 10483.20

(D) Rs. 10682.20

View Answer

Ans: B

Amount = Rs.[25000×(1+

12

100

)3]

              = Rs. (25000×

28

25

×

28

25

×

28

25

) = Rs. 35123.20.

C.I. = Rs. (35123.20 - 25000) = Rs. 10123.20.