Correct Answers: | |

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### Question 1

An interest rate of 18% compounded half-annually is offered by a bank. An account holder deposits Rs. 60000 in the bank under this scheme. After six months he again deposits Rs 60000. What is the total amount that he will get after 1 year?

**A**

Rs. 136686.

**B**

Rs. 154444.

**C**

Rs. 154244.

**D**

Rs. 154544.

**Soln.**

**Ans: a**

Let P, A, r and n have their usual meanings. For the first deposit n = 2, and for the second deposit n = 1. So total amount is P × $((1 + r/100)^2 + (1 + r/100))$ = $P/10000$ × $((100 + r)^2 + 100(100 + r))$ = $P/10000 × (100 + r)$ × $(100 + r + 100)$ which equals ${P × (100 + r) × (200 + r)}/10000.$ Putting r = 9 and P = 60000 and cancelling 10000, we get 6 × 109 × 209 = Rs. 136686. *Please note that the rate of interest will be 1/2 because the compounding is half yearly.*

### Question 2

What is the amount receivable on Rs. 60000 after 6 months, invested at a rate of 20% compounded quarterly?

### Question 3

The difference in compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 54. What is the principal amount if the rate is 3% p.a.?

**A**

Rs. 60000.

**B**

Rs. 70000.

**C**

Rs. 50000.

**D**

Rs. 80000.

**Soln.**

**Ans: a**

The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$. So Principal = $(Difference × 10000)/(rate × rate)$ = $(54 × 10000)/(3 × 3)$ = Rs. 60000.

### Question 4

What is the difference in compound interest and simple interest on an amount of Rs. 30000 for a period of 2 years if the rate is 5% p.a. compounded annually?

### Question 5

How much interest does an amount of Rs. 50000 earn @4% compounded annually for 2 years?

### More Chapters | See All...

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This Blog Post/Article "Compound Interest Quiz Set 002" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Updated on 2017-05-17.