Compound Interest Questions and Answers

Exercise

Exercise 1
Exercise 2
Exercise 3

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Q 1

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. 400

B)  

Rs. 500

C)  

Rs. 600

D)  

Rs. 800


Correct Option - B

Explanation


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Q 2

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)  

None of these


Correct Option - A

Explanation


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Q 3

The difference between compound interest and simple interest on a sum of Rs.10000 for 2 years at a rate of 5% interest is


A)  

Rs.25

B)  

Rs.20

C)  

Rs.10

D)  

Rs.5


Correct Option - A

Explanation

S.I = 10000*2*5/100 = 1000


C.I = [10000(1+(5/100))^2)] - 10000 = 1025


C.I-S.I = Rs.25

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Q 4

Ram and Shyam deposit an equal amount of money in a bank at simple interest. Ram deposits for a time thrice as long as Shyam at two-thirds of Shyam’s interest rate. Find the ratio of the interests received by Ram and Shyam.


A)  

2:3

B)  

2:1

C)  

3:2

D)  

1:2


Correct Option - B

Explanation

Let the amount be Rs.P


Interest received by Shyam 

= P*T*R/100

Interest received by Ram 

=[ P*3T*(2/3)R]/100 

= 2PTR/100

Ram’s Interest:Shyam’s Interest = 2:1

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Q 5

If the simple interest on a certain sum of money for 3 years at 10% interest is Rs.300, find the compound interest on the same sum for the same time at the same rate of interest.


A)  

Rs.300

B)  

Rs.321

C)  

Rs.210

D)  

Rs.331


Correct Option - D

Explanation

P = 300*100/(3*10) = Rs.1000


A = 1000*(1+(10/100))^3 = 1331


C.I = 1331-1000 =Rs.331

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Q 6

Simple interest on Rs.3500 for 2 years at 9% interest is equal to the compound interest on a certain sum of money for the same number of years at 10% per annum. Find the sum of money.


A)  

Rs.3310

B)  

Rs.3000

C)  

Rs.3500

D)  

Rs.6300


Correct Option - D

Explanation

S.I = 3500*2*9/100 = Rs.630


C.I = P[(1+(10/100))^2] – P 

= P[(1.1)^2 – 1] 

= 0.21P 

= 630

P = Rs.3000

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Q 7

At what rate of compound interest will a sum of Rs.8000 amount to Rs.8820 in two years?


A)  

8%

B)  

10%

C)  

6%

D)  

5%


Correct Option - D

Explanation

8820 = 8000[(1+(R/100))²]


[1+(R/100)]² = 8820/8000 = 1.1025 = (1.05)² 


R = 5%

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