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:

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 12% per annum is Rs 900. What is the value of given sum (in Rs)?

A) 125000 B) 250000
C) 62500 D) 187500
 
Answer & Explanation Answer: C) 62500

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Q:

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 18% per annum is Rs 81. The sum is ____.

A) Rs 2500 B) Rs 5000
C) Rs 10000 D) Rs 7500
 
Answer & Explanation Answer: A) Rs 2500

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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 9,600 and Rs 10,272 respectively, what is the rate of interest (in %)?

A) 7 B) 8
C) 6 D) 5
 
Answer & Explanation Answer: A) 7

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Q:

A sum of Rs 10000 becomes Rs 14641 when invested at compound interest at the yearly interest rate of 20% per annum. If the compounding is done half yearly, then for how many years was the sum invested?

 

A) 1 B) 2
C) 3 D) 4
 
Answer & Explanation Answer: B) 2

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Q:

A bank offers 20% compound interest per half year. A customer deposits Rs 6000 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 7680 B) Rs 3840
C) Rs 1920 D) Rs 960
 
Answer & Explanation Answer: B) Rs 3840

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Q:

There is 40% increase in an amount in 5 years at simple interest. What will be the compound interest of Rs. 25000 after 3 years at the same rate?

A) Rs 6492.8 B) Rs 12985.6
C) Rs 16232 D) Rs 9739.2
 
Answer & Explanation Answer: A) Rs 6492.8

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Q:

A bank offers 20% compound interest per half year. A customer deposits Rs 2800 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 3584 B) Rs 896
C) Rs 1792 D) Rs 448
 
Answer & Explanation Answer: C) Rs 1792

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Q:

The amount (in Rs) received at 10% per annum compound interest after 3 yrs is Rs 1,19,790. What was the principal?

A) 90000 B) 1,00,000
C) 80000 D) 75000
 
Answer & Explanation Answer: A) 90000

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