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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:

A bank offers 10% compound interest per half year. A customer deposits Rs. 5200 each on 1st January and 1st July of a year. At the end of the year, the amount he would have profit by way of interest is:

A) Rs 3224 B) Rs 1612
C) Rs 806 D) Rs 403
 
Answer & Explanation Answer: B) Rs 1612

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Q:

A woman invests Rs. 2000 at the start of each year at 5% C.I. per annum. How much will her investments be at the end of the 2nd year?

A) Rs. 4305 B) Rs. 430
C) Rs. 4355 D) Rs. 4350
 
Answer & Explanation Answer: A) Rs. 4305

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14 2771
Q:

Calculate the amount on Rs. 1875 for 2 year at 4% per annum, compounded yearly.

A) Rs. 676 B) Rs. 776
C) Rs. 1778 D) Rs. 2028
 
Answer & Explanation Answer: D) Rs. 2028

Explanation:

Amount = P(1 + r/100)^t
Amount = 1875(1 + 4/100)^2
Amount = 1875(104/100)(104/100)
Amount = 2028

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Q:

A bank offers 15% compound interest per half year. A customer deposits Rs 8800 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 8315 B) Rs 2079
C) Rs 4158 D) Rs 1039
 
Answer & Explanation Answer: C) Rs 4158

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3 2296
Q:

An article costs Rs 50 presently. The rate of inflation is 300%. What will be cost of this article after two years?

A) Rs 200 B) Rs 600
C) Rs 800 D) Rs 1000
 
Answer & Explanation Answer: C) Rs 800

Explanation:

A = P(1 + r/100)n   ⇒50(1 + 300/100)2   ⇒50(4)2  ⇒800

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5 2285
Q:

Find the compound interest on Rs. 62500 at 21% per annum for 1.5 years.

A) Rs. 20695 B) Rs. 19687.5
C) Rs. 20687.5 D) Rs. 21638.5
 
Answer & Explanation Answer: C) Rs. 20687.5

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Q:

A man borrowed some money and agreed to pay-off by paying Rs 3150 at the end of the 1st year and Rs 4410 at the end of the 2nd year. If the rate of compound interest is 5% per annum, then the sum is

A) Rs 5000 B) Rs 6500
C) Rs 7000 D) Rs 9200
 
Answer & Explanation Answer: C) Rs 7000

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Q:

If compound interest received on a certain amount in the 2nd year is Rs 1200, what will be the compound interest (in Rs) for the 4th year on the same amount at 10% rate of interest?

A) 1452 B) 1320
C) 1552 D) 1420
 
Answer & Explanation Answer: A) 1452

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