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 =P1+R100n

2.  When interest is compounded Half-yearly:

Amount = P1+(R2)1002n

3.  When interest is compounded Quarterly:

Amount = P1+R41004n

 

II.

1.  When interest is compounded Annually but time is in fraction, say 325 years.

Amount = P1+R1003×1+25R100

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

Then, Amount = P1+R11001+R21001+R3100

 

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

Present Worth = x1+R100n

Q:

The difference between compound interest and simple interest on a certain sum of money for 2 years at 5% per annum is Rs. 41. What is the sum of money?

A) Rs.7200 B) Rs.9600
C) Rs.16400 D) Rs.8400
 
Answer & Explanation Answer: C) Rs.16400

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Q:

What is the difference (in Rs) between compound interest (compounded annually) and simple interest for 3 years on a principal of Rs 3000 at the annual rate of 20%?

A) 464 B) 384
C) 356 D) 424
 
Answer & Explanation Answer: B) 384

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1 1449
Q:

A bank offers 5% compound interest per half year. A customer deposits Rs 4800 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest?

A) Rs 732 B) Rs 1464
C) Rs 366 D) Rs 183
 
Answer & Explanation Answer: A) Rs 732

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Q:

If the difference between the compound interest and the simple interest on a certain sum at the rate of 5% per annum for 2 years is Rs. 20, then the sum is

A) Rs. 2000 B) Rs. 4000
C) Rs. 6000 D) Rs. 8000
 
Answer & Explanation Answer: D) Rs. 8000

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4 1423
Q:

If the interest is compounded half-yearly, then what will be the compound interest (in Rs) on a sum of Rs 10000 for 1 year at the rate of 10% per annum?

A) 1250 B) 525
C) 1000 D) 1025
 
Answer & Explanation Answer: D) 1025

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Q:

If the amount received at the end of 2nd and 3rd year at Compound Interest on a certain Principal is Rs 28090, and Rs 29775.4 respectively, what is the rate of interest?

A) 6 percent B) 3 percent
C) 12 percent D) 10 percent
 
Answer & Explanation Answer: A) 6 percent

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Q:

A sum of Rs 8000 becomes Rs 12500 in 2 years at a certain rate of compound interest. What will be the sum (in Rs) after 3 years?

 

A) 13175   B) 14225
C) 12575 D) 15625
 
Answer & Explanation Answer: D) 15625

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Q:

If the amount received at the end of 2nd and 3rd year at Compound Interest on a certain Principal is Rs 33708, and Rs 35730.48 respectively, what is the rate of interest?

A) 6 percent B) 3 percent
C) 12 percent D) 10 percent
 
Answer & Explanation Answer: A) 6 percent

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