# Compound Interest Quiz Set 016

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 Correct Answers: Wrong Answers: Unattempted:

### Question 1

An amount P is invested for 2 years @6% p.a. The simple interest is Rs. 6000. What would be the compound interest on the same amount, at the same rate and for the same time, compounded annually?

A

Rs. 6180.

B

Rs. 6280.

C

Rs. 6080.

D

Rs. 6380.

Soln.
Ans: a

Let SI, P, r, t have usual meanings. Then, for 2 years, SI = (P × r × 2)/100. So P = \$(50 × SI)/r\$. The compound interest for 2 years by shortcut formula is \${P × r × (200 + r)}/10000\$. Putting P here, it becomes, \${{(50 × SI)/r} × r × (200 + r)}/10000\$ = \${SI × (r + 200)}/200\$ = \${6000 × (6 + 200)}/200\$ = Rs. 6180.

### Question 2

How much interest does an amount of Rs. 1000000 earn @4% compounded annually for 3 years?

A

Rs. 124864.

B

Rs. 124964.

C

Rs. 124764.

D

Rs. 125064.

Soln.
Ans: a

Amount A = 1000000 × \$(1 + 4/100)^3\$, which equals 1000000 × \$104/100\$ × \$104/100\$ × \$104/100\$ = 1 × 104 × 104 × 104 = Rs. 1124864. So interest = A - P = 1124864 - 1000000 = Rs. 124864.

### Question 3

An interest rate of 4% compounded half-annually is offered by a bank. An account holder deposits Rs. 10000 in the bank under this scheme. After six months he again deposits Rs 10000. What is the total amount that he will get after 1 year?

A

Rs. 20604.

B

Rs. 21316.

C

Rs. 21116.

D

Rs. 21416.

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 = 2 and P = 10000 and cancelling 10000, we get 1 × 102 × 202 = Rs. 20604. Please note that the rate of interest will be 1/2 because the compounding is half yearly.

### Question 4

The interest earned by an amount of Rs. 90000 @2% compounded annually is Rs. 3636. What is the period in years?

A

2 years.

B

3 years.

C

1 year.

D

1/2 year.

Soln.
Ans: a

The amount is 90000 + 3636. So 93636 = 90000 × \$(102/100)^n\$. So \$93636/90000\$ = \$(102/100)^n\$, which can be put in the form \$(102/100)^2\$ = \$(102/100)^n\$, so n = 2 years.

### Question 5

The compound amount after 3 years on a principal of Rs. x is same as that on a principal of Rs. (828 - x) after 4 years, then what is x if the rate of interest is 7% p.a. compounded yearly?

A

Rs. 428.

B

Rs. 528.

C

Rs. 328.

D

Rs. 628.

Soln.
Ans: a

We have x × \$(1 + 7/100)^3\$ = (828 - x) × \$(1 + 7/100)^4\$. Cancelling, we get x = (828 - x) × (1 + 7/100). Simplifying, x = \${828 × (100 + 7)}/(200 + 7)\$, which gives x = Rs. 428.

This Blog Post/Article "Compound Interest Quiz Set 016" 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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