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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:

Shams invested Rs. 5000 at 10% per annum compound interest. After n years, Shams received Rs. 1655 more. Find the value of n.

 

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

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Q:

The compound interest earned in two years at 8% per annum is Rs 4160. What is the sum (in Rs) invested?

A) 24000 B) 25000
C) 30000 D) 20000
 
Answer & Explanation Answer: B) 25000

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Q:

On a certain principal, simple interest amounts to Rs. 2,000 in two years at the rate of 10% p.a. What will be the difference in the amount of interest if the same is compounded on annual basis?

A) Rs.200 B) Rs.220
C) Rs.100 D) Rs.120
 
Answer & Explanation Answer: C) Rs.100

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Q:

What is the Compound interest on Rs. 5000 in 3 years, if the rate of interest is 4% for the first year, 3% for the second year and 2% for the third year?

A) Rs. 435.21 B) Rs. 453.12
C) Rs. 436.12 D) Rs. 463.12
 
Answer & Explanation Answer: D) Rs. 463.12

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Q:

What is the difference (in Rs) between the compound interests on Rs. 4000 for 1 year at 12% per annum compounded yearly and half-yearly?

A) 14.4 B) 12.4
C) 10.4 D) 16.4
 
Answer & Explanation Answer: A) 14.4

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Q:

The compound interest earned in two years at 15% per annum is Rs 20640. What is the sum invested (in Rs)?

A) 64000 B) 60000
C) 56000 D) 52000
 
Answer & Explanation Answer: A) 64000

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Q:

Compound interest on a certain sum for 2 years at the rate of 11% per annum is Rs 1160.5. What will be the simple interest (in Rs) for the same
amount at the same rate of interest for 2 years?

 

A) 9000 B) 1000
C) 1100 D) 1050
 
Answer & Explanation Answer: C) 1100

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Q:

A bank offers 10% compound interest per half year. A customer deposits Rs. 3600 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 1116 B) Rs 2232
C) Rs 558 D) Rs 279
 
Answer & Explanation Answer: A) Rs 1116

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