# Compound Interest Quiz Set 004

### Question 1

How much interest does an amount of Rs. 9000000 earn @8% compounded annually for 3 years?

A

Rs. 2337408.

B

Rs. 2337508.

C

Rs. 2337308.

D

Rs. 2337608.

Soln.
Ans: a

Amount A = 9000000 × $(1 + 8/100)^3$, which equals 9000000 × $108/100$ × $108/100$ × $108/100$ = 9 × 108 × 108 × 108 = Rs. 11337408. So interest = A - P = 11337408 - 9000000 = Rs. 2337408.

### Question 2

The compound interest on a certain sum of money at 5% for a period of 2 years is Rs. 3075. What is the SI on this sum if the rate is halved, and time doubled?

A

Rs. 3000.

B

Rs. 3100.

C

Rs. 2900.

D

Rs. 3200.

Soln.
Ans: a

The shortcut formula is CI = Pr(r + 200)/10000. Putting CI = 3075, r = 5, we get 3075 = ${P × 5 × (5 + 200)}/10000$. We can solve it to get P = Rs. 30000. The SI = P × (2 × t) × (r / 200) = P × t × (r / 100). Putting t = 2, r = 5 and P = 30000, we get SI = Rs. 3000.

### Question 3

What is the difference in compound interest and simple interest on an amount of Rs. 40000 for a period of 2 years if the rate is 7% p.a. compounded annually?

A

Rs. 196.

B

Rs. 296.

C

Rs. 246.

D

Rs. 396.

Soln.
Ans: a

The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$, which equals $(40000 × 7^2)/10000$ = Rs. 196.

### Question 4

The compound interest on a certain sum of money at 6% for a period of 2 years is Rs. 8652. What is the SI on this sum if the rate is halved, and time doubled?

A

Rs. 8400.

B

Rs. 8500.

C

Rs. 8300.

D

Rs. 8600.

Soln.
Ans: a

The shortcut formula is CI = Pr(r + 200)/10000. Putting CI = 8652, r = 6, we get 8652 = ${P × 6 × (6 + 200)}/10000$. We can solve it to get P = Rs. 70000. The SI = P × (2 × t) × (r / 200) = P × t × (r / 100). Putting t = 2, r = 6 and P = 70000, we get SI = Rs. 8400.

### Question 5

The compound interest on a certain sum of money at 3% for a period of 2 years is Rs. 5481. What is the SI on this sum if the rate is halved, and time doubled?

A

Rs. 5400.

B

Rs. 5500.

C

Rs. 5300.

D

Rs. 5600.

Soln.
Ans: a

The shortcut formula is CI = Pr(r + 200)/10000. Putting CI = 5481, r = 3, we get 5481 = ${P × 3 × (3 + 200)}/10000$. We can solve it to get P = Rs. 90000. The SI = P × (2 × t) × (r / 200) = P × t × (r / 100). Putting t = 2, r = 3 and P = 90000, we get SI = Rs. 5400.

This Blog Post/Article "Compound Interest Quiz Set 004" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Updated on 2017-05-17.

Posted by Parveen(Hoven),
Aptitude Trainer