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Q:

What will Rs.1500 amount to in three years if it is invested in 20% p.a. compound interest, interest being compounded annually?

A) Rs.2592	B) Rs.2492
C) Rs.2352	D) Rs.2352

Answer & Explanation Answer: A) Rs.2592

Explanation:

The usual way to find the compound interest is given by the formula A = .p(1+r/100)^n

In this formula,

A is the amount at the end of the period of investment

P is the principal that is invested

r is the rate of interest in % p.a

And n is the number of years for which the principal has been invested.

In this case, it would turn out to be A =1500(1+20/100)^3

= 2592.

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Q:

The compound interest on a certain sum for 2 years at 10% per annum is Rs. 525. The simple interest on the same sum for double the time at half the rate percent per annum is

A) Rs.4000	B) Rs.500
C) Rs.600	D) Rs.800

Answer & Explanation Answer: B) Rs.500

Explanation:

Let the sum be Rs. P.

Then,[p(1+10/100)2-p]=525

Sum =Rs.2500

S.I.= Rs.(2500*5*4)/100

= Rs. 500

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Q:

The difference between compound interest and simple interest on an amount of Rs. 15,000 for 2 years is Rs. 96. What is the rate of interest per annum?

A) 8	B) 10
C) 12	D) 14

Answer & Explanation Answer: A) 8

Explanation:

[15000*(1+r/100)2-15000]-(15000*r*2)/100=96

Rate=8%

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Q:

The present worth of Rs.1404 due in two equal half-yearly instalments at 8% per annum. Simple interest is:

A) 1320	B) 1300
C) 1325	D) 1200

Answer & Explanation Answer: C) 1325

Explanation:

Required Sum = PW of Rs.702 due 6 months hence + PW of Rs.702 due 1 year hence

= Rs.[ (100 x 702) / (100+(8 x 1/2)) ] + [ (100 x 702) / (100+(8 x 1)) ]

= Rs.1325

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Q:

A man wants to sell his scooter .There are two offers one at Rs12000 cash and other at a credit of Rs12880 to be paid after 8 months ,money being at 18% per annum which is better offer?

A) Rs.12880	B) Rs.12000
C) Both are equally good	D) None of the above

Answer & Explanation Answer: B) Rs.12000

Explanation:

PW of Rs.12,880 due 8 months hence

= Rs. [12880 x 100] / [100+(18 x 8/12)] =Rs.11500

Clearly 12000 in cash is a better offer.

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Q:

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

A) Rs.2	B) Rs.3
C) Rs.4	D) Rs.5

Answer & Explanation Answer: B) Rs.3

Explanation:

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

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Q:

If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time

A) Rs.51.25	B) Rs.61.25
C) Rs.51	D) Rs.42

Answer & Explanation Answer: A) Rs.51.25

Explanation:

Sum = Rs.(50*100)/2*5=Rs.500

Amount=Rs.[500*(1+5/100)2]

= Rs. 551.25

C.I = Rs.(551.25-500)= Rs.51.25

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Q:

If Rs.10 be allowed as true discount on a bill of Rs.110 at the end of a certain time , then the discount allowed on the same sum due at the end of double the time is

A) 18.20	B) 18.33
C) 18	D) 18.30

Answer & Explanation Answer: B) 18.33

Explanation:

Present worth = Amount - True Discount = 110 -10 = Rs.100

SI on Rs.100 for a certain time = Rs.10

SI on Rs.100 for doube the time = Rs.20

True Discount on Rs.120 = 120 - 100 = Rs.20

True Discount on Rs.110 = $(110 \times \frac{20}{120})$ = Rs.18.33

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