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Quantitative Aptitude - Arithmetic Ability/
Compound Interest

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.

1. When interest is compound Annually:

Amount = $P {(1 + \frac{R}{100})}^{n}$

2. When interest is compounded Half-yearly:

Amount = $P {[1 + \frac{(\frac{R}{2})}{100}]}^{2 n}$

3. When interest is compounded Quarterly:

Amount = $P {[1 + \frac{(\frac{R}{4})}{100}]}^{4 n}$

II.

1. When interest is compounded Annually but time is in fraction, say $3 \frac{2}{5}$ years.

Amount = $P {(1 + \frac{R}{100})}^{3} \times (1 + \frac{\frac{2}{5} R}{100})$

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

Then, Amount = $P (1 + \frac{R_{1}}{100}) (1 + \frac{R_{2}}{100}) (1 + \frac{R_{3}}{100})$

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

Present Worth = $\frac{x}{{(1 + \frac{R}{100})}^{n}}$

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

A) 2

B) 4

C) 6

D) 8

Answer & Explanation Answer: B) 4

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3 1638

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

A) 8

B) 10

C) 12

D) 6

Answer & Explanation Answer: A) 8

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0 1627

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

A) 24000

B) 25000

C) 30000

D) 20000

Answer & Explanation Answer: B) 25000

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8 1606

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

A) 18

B) 24

C) 12

D) 30

Answer & Explanation Answer: A) 18

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1 1596

What is the compound interest (in Rs) for 1 year on a sum of Rs 20000 at the rate of 40% per annum compounding half yearly?

A) 8000	B) 8650
C) 8750	D) 8800

A) 8000

B) 8650

C) 8750

D) 8800

Answer & Explanation Answer: D) 8800

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8 1591

A sum of Rs 4000 becomes Rs 6000 in 1 year at a certain rate of compound interest. What will be the sum (in Rs) after 4 years?

A) 16250	B) 12000
C) 20250	D) 19500

A) 16250

B) 12000

C) 20250

D) 19500

Answer & Explanation Answer: C) 20250

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8 1570

If Rs. 2,000 is invested at the rate of 20% per annum, compounded half-yearly, then the amount after 18 months will be:

A) Rs.2628	B) Rs.2662
C) Rs.2600	D) Rs.3200

A) Rs.2628

B) Rs.2662

C) Rs.2600

D) Rs.3200

Answer & Explanation Answer: D) Rs.3200

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8 1570

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?