Compound Interest Questions

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:

If the compound interest for the 3rd and 4th year on a certain principal is Rs 125 and Rs 135 respectively, what is the rate of interest (in %)?

A) 9 B) 10
C) 8 D) 12
 
Answer & Explanation Answer: C) 8

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Q:

The compound interest on Rs. 24000 at 10% per annum for 11⁄2 years, interest being compounded semi­annually is

A) Rs.3783 B) Rs.3777
C) Rs.3780 D) Rs.3781
 
Answer & Explanation Answer: A) Rs.3783

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Q:

The amount received at 10% per annum Compound interest after 3 yrs is Rs 5324. What was the principal (in Rs)?

A) 4100 B) 4200
C) 4000 D) 4300
 
Answer & Explanation Answer: C) 4000

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Q:

If the amount received at the end of 2nd and 3rd year at compound interest on a certain Principal is Rs 30250, and Rs 33275 respectively, what is the rate of interest?

A) 10 percent B) 5 percent
C) 20 percent D) 16 percent
 
Answer & Explanation Answer: A) 10 percent

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Q:

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
 
Answer & Explanation Answer: D) Rs.3200

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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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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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Q:

A bank offers 20% compound interest calculated on half year basis. A customer deposits Rs 9200 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 11776 B) Rs 2944
C) Rs 1472 D) Rs 5888
 
Answer & Explanation Answer: D) Rs 5888

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