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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 difference (in Rs) in Compound interest earned in 1 year on a sum of Rs 25,000 at 20% per annum compounded semi-annually and annually?

A) 125 B) 250
C) 500 D) 375
 
Answer & Explanation Answer: B) 250

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0 1475
Q:

On a certain principal if the simple interest for two years is Rs 1400 and compound interest for the two years is Rs 1449, what is the rate of Interest?

A) 7 percent B) 3.5 percent
C) 14 percent D) 10 percent
 
Answer & Explanation Answer: A) 7 percent

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4 1472
Q:

In how many years will Rs 25,000 yield Rs 8,275 as compound interest at 10% per annum compounded annually?

A) 2 B) 4
C) 3 D) 5
 
Answer & Explanation Answer: C) 3

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3 1463
Q:

A bank offers 20% compound interest per half year. A customer deposits Rs 6000 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 is

A) Rs 7680 B) Rs 3840
C) Rs 1920 D) Rs 960
 
Answer & Explanation Answer: B) Rs 3840

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0 1433
Q:

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 5% per annum is Rs 45. The sum is

A) Rs 36000 B) Rs 72000
C) Rs 18000 D) Rs 54000
 
Answer & Explanation Answer: C) Rs 18000

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2 1431
Q:

The compound interest earned in two years at 12% per annum is Rs 10176. What is the sum (in Rs) invested?

A) 50000 B) 60000
C) 40000 D) 80000
 
Answer & Explanation Answer: C) 40000

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1 1427
Q:

At what rate of compound interest per annum will a sum of Rs 20000 become Rs 25088 in 2 years?

A) 24 percent B) 8 percent
C) 12 percent D) 16 percent
 
Answer & Explanation Answer: C) 12 percent

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0 1426
Q:

A sum of Rs 6000 becomes Rs 7200 in 2 years, when invested in a scheme of simple interest. If the same sum is invested in a scheme of compound interest with same yearly interest rate (compounding of interest is done yearly), then what will be the amount (in Rs) after 3 years?

 

A) 7434   B) 8244  
C) 7864   D) 7986
 
Answer & Explanation Answer: D) 7986

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7 1423