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

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

Explanation:

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0 1542

Shams invested Rs. 5000 at 10% per annum compound interest. After n years, Shams received Rs. 1655 more. Find the value of n.

A) 3 years	B) 4 years
C) 2 years	D) 1 year

A) 3 years

B) 4 years

C) 2 years

D) 1 year

Answer & Explanation Answer: A) 3 years

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5 1540

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

A) Rs.1505

B) Rs.1535

C) Rs.1545

D) Rs.1550

Answer & Explanation Answer: C) Rs.1545

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6 1538

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 1517

If compound interest received on a certain amount in the 3rd year is Rs. 12,100, what will be the compound interest (in Rs) for the 4th year on the same amount if rate of interest is 9%?

A) 17080	B) 15669
C) 13189	D) 14376

A) 17080

B) 15669

C) 13189

D) 14376

Answer & Explanation Answer: C) 13189

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0 1515

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%

A) 7.5%

B) 7%

C) 6%

D) 6.5%

Answer & Explanation Answer: B) 7%

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2 1509

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 1508

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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