# Compound Interest Questions

**FACTS AND FORMULAE FOR COMPOUND INTEREST QUESTIONS**

Let Principal = P, Rate = R% per annum, Time = n years.

**I.**

**1. When interest is compound Annually:**

Amount =

**2. When interest is compounded Half-yearly:**

Amount =

**3. When interest is compounded Quarterly:**

Amount =

**II.**

**1. When interest is compounded Annually but time is in fraction, say 3 years.**

Amount =

**2. When Rates are different for different years, say R1%, R2%, R3% for 1st, 2nd and 3rd year respectively.**

Then, Amount =

**III. Present worth of Rs. x due n years hence is given by:**

Present Worth =

A) 10000 | B) 20000 |

C) 40000 | D) 50000 |

Explanation:

Let sum=Rs.x

C.I. when compounded half yearly =

C.I. when compounded annually =

=> x=20000

A) 2109 | B) 3109 |

C) 4109 | D) 6109 |

Explanation:

Time = 2 years 4 months = 2(4/12) years = 2(1/3) years.

Amount = Rs'. [8000 X (1+(15/100))^2 X (1+((1/3)*15)/100)]

=Rs. [8000 * (23/20) * (23/20) * (21/20)]

= Rs. 11109. .

:. C.I. = Rs. (11109 - 8000) = Rs. 3109.

A) 4360 | B) 4460 |

C) 4560 | D) 4660 |

Explanation:

Let the sum be Rs.P.then

P(1+R/100)^3=6690…(i) and P(1+R/100)^6=10035…(ii)

On dividing,we get (1+R/100)^3=10025/6690=3/2.

Substituting this value in (i),we get:

P*(3/2)=6690 or P=(6690*2/3)=4460

Hence,the sum is rs.4460.

A) I only | B) II and III only |

C) All I, II and III | D) I only or II and III only |

Explanation:

Thus I only or (II and III) give answer.

Correct answer is (D)

A) Rs.24.64 | B) Rs.21.85 |

C) Rs.16 | D) Rs.16.80 |

Explanation:

For 1st year S.I =C.I.

Thus, Rs.16 is the S.I. on S.I. for 1 year, which at 8% is thus Rs.200

i.e S.I on the principal for 1 year is Rs.200

Principle = = Rs.2500

Amount for 2 years, compounded half-yearly

C.I = Rs.424.64

Also,

Hence, [(C.I) - (S.I)] = Rs. (424.64 - 400) = Rs.24.64