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 Compound Interest Questions

Popular Latest Rated Important Formulae

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:

What is the compound interest earned on Rs 80,000 at 40% per annum in 1 year compounded quarterly?

A) 28317 B) 37128
C) 18732 D) 21387
 
Answer & Explanation Answer: B) 37128

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Q:

On a certain principal, simple interest amounts to Rs. 2,000 in two years at the rate of 10% p.a. What will be the difference in the amount of interest if the same is compounded on annual basis?

A) Rs.200 B) Rs.220
C) Rs.100 D) Rs.120
 
Answer & Explanation Answer: C) Rs.100

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Q:

What is the rate of interest (in %) if simple interest earned on a certain sum for the 3rd year is Rs 2,000 and compound interest earned in 2 years is Rs 4,160?

A) 8 B) 10
C) 12 D) 6
 
Answer & Explanation Answer: A) 8

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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 1,800, and Rs 1,926 respectively, what is the rate of interest?

A) 7.5% B) 7%
C) 6% D) 6.5%
 
Answer & Explanation Answer: B) 7%

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Q:

In how many months will Rs 8,000 yield Rs 2,648 as compound interest at 20% per annum compounded semi-annually?

A) 18 B) 24
C) 12 D) 30
 
Answer & Explanation Answer: A) 18

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Q:

The compound interest earned in two years at 8% per annum is Rs 4160. What is the sum (in Rs) invested?

A) 24000 B) 25000
C) 30000 D) 20000
 
Answer & Explanation Answer: B) 25000

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Q:

If a sum of Rs.12500 is invested for 1 year at 12% per annum interest being compounded semi­-annually, then interest earned is

A) Rs.1505 B) Rs.1535
C) Rs.1545 D) Rs.1550
 
Answer & Explanation Answer: C) Rs.1545

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Q:

A sum of Rs. 2000 amounts to Rs. 4000 in two years at compound interest. In how many years does the same amount becomes Rs. 8000.

A) 2 B) 4
C) 6 D) 8
 
Answer & Explanation Answer: B) 4

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