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:

At what rate of compound interest per annum will a sum of Rs 10000 become Rs 12321 in 2 years?

A) 22 percent B) 11 percent
C) 7 percent D) 15 percent
 
Answer & Explanation Answer: B) 11 percent

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12 1569
Q:

A bank offers 5% compound interest per half year. A customer deposits Rs. 3200 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 976 B) Rs 244
C) Rs 488 D) Rs 122
 
Answer & Explanation Answer: C) Rs 488

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4 1500
Q:

Rs 260200 is divided between Ram and Shyam so that the amount that Ram receives in 3 years is the same as that Shyam receives in 6 years. If the interest is compounded annually at the rate of 4% per annum then Ram's share is

A) 125000 B) 135200
C) 152000 D) 108200
 
Answer & Explanation Answer: B) 135200

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2 1494
Q:

The compound interest earned in two years at 12% per annum is Rs 10176. What is the sum (in Rs) invested?

A) 50000 B) 60000
C) 40000 D) 80000
 
Answer & Explanation Answer: C) 40000

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5 1493
Q:

What is the compound interest (in Rs) for 1 year on a sum of Rs 20000 at the rate of 40% per annum compounding half yearly?

A) 8000 B) 8650
C) 8750 D) 8800
 
Answer & Explanation Answer: D) 8800

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8 1463
Q:

A loan of Rs. 305 was taken at a certain rate per annum of compound interest, for 3 years. After 3 years the amount repaid was Rs. 670, calculate the rate of compound interest.

A) 30% B) 35%
C) 33% D) 25%
 
Answer & Explanation Answer: A) 30%

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9 1461
Q:

A sum of Rs. 2000 amounts to Rs. 4000 in two years at compound interest. In how many years does the same amount becomes Rs. 8000.

A) 2 B) 4
C) 6 D) 8
 
Answer & Explanation Answer: B) 4

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3 1456
Q:

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
 
Answer & Explanation Answer: A) 8

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0 1425