Compound Interest Quiz Set 006

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Question 1

The compound interest on a certain sum of money at 6% for a period of 2 years is Rs. 7416. What is the SI on this sum if the rate is halved, and time doubled?

 A

Rs. 7200.

 B

Rs. 7300.

 C

Rs. 7100.

 D

Rs. 7400.

Soln.
Ans: a

The shortcut formula is CI = Pr(r + 200)/10000. Putting CI = 7416, r = 6, we get 7416 = ${P × 6 × (6 + 200)}/10000$. We can solve it to get P = Rs. 60000. The SI = P × (2 × t) × (r / 200) = P × t × (r / 100). Putting t = 2, r = 6 and P = 60000, we get SI = Rs. 7200.


Question 2

Rs. 1224 is divided into parts such that the compound amount on first part after 6 years is same as that for the other part after 7 years. What is the first part if the rate of interest in both the cases is 4%?

 A

Rs. 624.

 B

Rs. 724.

 C

Rs. 524.

 D

Rs. 824.

Soln.
Ans: a

Let the parts P and (1224 - P). We have P × $(1 + 4/100)^6$ = (1224 - P) × $(1 + 4/100)^7$. Cancelling, we get P = (1224 - P) × (1 + 4/100). Simplifying, P = ${1224 × (100 + 4)}/(200 + 4)$, which gives P = Rs. 624.


Question 3

How much interest does an amount of Rs. 30000 earn @8% compounded annually for 2 years?

 A

Rs. 4992.

 B

Rs. 5092.

 C

Rs. 4892.

 D

Rs. 5192.

Soln.
Ans: a

Amount A = 30000 × $(1 + 8/100)^2$, which equals 30000 × $108/100$ × $108/100$ = 3 × 108 × 108 = Rs. 34992. So interest = A - P = 34992 - 30000 = Rs. 4992.


Question 4

A bank offers an interest rate of 5% compounded annually. Initially I deposit Rs. 50000 in the bank under this scheme. After 1 year I again deposit Rs 50000. What is the total amount that I will get after 2 years?

 A

Rs. 107625.

 B

Rs. 107725.

 C

Rs. 107525.

 D

Rs. 107825.

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 = 5 and P = 50000 and cancelling 10000, we get 5 × 105 × 205 = Rs. 107625.


Question 5

What is compound interest on Rs. 80000 after 2 years, invested at a rate of 6% compounded annually?

 A

Rs. 9888.

 B

Rs. 9988.

 C

Rs. 9788.

 D

Rs. 10088.

Soln.
Ans: a

The shortcut formula is CI = Pr(r + 200)/10000. Putting P = 80000, r = 6, we get ${80000 × 6 × (6 + 200)}/10000$ = Rs. 9888.


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This Blog Post/Article "Compound Interest Quiz Set 006" 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


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