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Quantitative Aptitude > Interest

SIMPLE & COMPOUND INTEREST MCQs

Compound Interest, Simple Interest, Interest (combined)

Total Questions : 1171 | Page 2 of 118 pages
Question 11.
  1. A sum of money amounts to Rs 14,520 in 2 years and to Rs 15,972 in 3 years reckoning compound interest at the rate of

  1.    5 %
  2.    10 %
  3.    15 %
  4.    20 %
 Discuss Question
Answer: Option B. -> 10 %
Given, Principal amount (P) = ?Amount after 2 years (A2) = Rs. 14,520Amount after 3 years (A3) = Rs. 15,972Rate of interest (r) = ?Time (n) = ?
As we know, the formula to calculate compound interest is:A = P (1 + r/n)^(n*t)
where,A = AmountP = Principal amountr = Rate of interestn = Number of times interest is compounded in a yeart = Time
Since the interest is compounded annually, we can assume that n = 1
Using the above formula, we can form two equations based on the given information:
Equation 1: 14,520 = P (1 + r/1)^(12)Equation 2: 15,972 = P (1 + r/1)^(13)
We can solve these equations to find the value of r.
Dividing equation 2 by equation 1, we get:
15,972/14,520 = (1 + r)^1/(1 + r)^21.1013 = 1/(1 + r)
Taking the reciprocal of both sides, we get:
1/(1.1013) = 1 + rr = 0.0916 or 9.16%
Therefore, the rate of interest is 9.16%. However, this is the annual rate of interest. The question asks for the rate of interest per annum. We can convert the annual rate of interest to per annum rate by using the formula:
Per annum rate = (1 + Annual rate/n)^n - 1
where n is the number of times the interest is compounded in a year.
In this case, n = 1 (since the interest is compounded annually)
Per annum rate = (1 + 0.0916/1)^1 - 1= 0.10 or 10%
Hence, the correct answer is option B (10%).If you think the solution is wrong then please provide your own solution below in the comments section .
Question 12.
  1. If the amounts for a fixed principal after 3 years and 2 years at a certain rate of compound interest are in the ratio of 21 : 20, then the rate of interest is

  1.    4 %
  2.    5 %
  3.    6 %
  4.    7 %
 Discuss Question
Answer: Option B. -> 5 %

 Compound interest is the interest earned on the initial principal and previously accumulated interest. 

 It is calculated as the sum of the initial principal and the accumulated interest from previous periods.

 Interest is usually applied at regular intervals, such as annually, semi-annually, quarterly, or monthly.  Compound Interest Formula: A=P(1+r/n)^nt 

 Where, A = Accrued Amount (principal + interest) P = Principal Amount r = Rate of Interest n = Number of times the interest is compounded per year t = Time in years 

 Given: Ratio of Amount after 3 years and 2 years = 21:20 

 To calculate the rate of interest (r) Step 1: We need to calculate the Accrued Amount (A) after 3 years and 2 years separately. 

 A = P(1+r/n)^nt 

 P = 1 (any value) t = 3 and 2 n = 1 (any value) 

 Substituting the values in the equation, Accrued Amount (A) after 3 years = P(1+r/n)^3 Accrued Amount (A) after 2 years = P(1+r/n)^2 

 Since we need to calculate the rate of interest (r), we will equate the ratio of Accrued Amount (A) after 3 years and 2 years to the given ratio. 21:20 = P(1+r/n)^3 : P(1+r/n)^2 Step 2: 

 After simplifying the equation, 2.1 = (1+r/n)^3 : (1+r/n)^2 Step 3: 

 Taking the log on both sides of the equation,  ln 2.1 = ln [ (1+r/n)^3 : (1+r/n)^2 ] 

 ln 2.1 = 3 ln (1+r/n) – 2 ln (1+r/n) 

 ln 2.1 = ln (1+r/n) 

 r/n = 2.1 – 1 

 r = (2.1 – 1) x n 

 Since n = 1 

 r = 2.1 – 1 

 r = 1.1 

 Hence, rate of interest (r) = 1.1 x 100 

 Rate of interest (r) = 5% Hence, the rate of interest is 5%.

If you think the solution is wrong then please provide your own solution below in the comments section .

Question 13.

  1. The difference between compound interest (compounded annually) and simple interest on a certain sum of money at 15% per annum in 2 years is Rs 225. Find the sum.

  1.    Rs 10000
  2.    Rs 11000
  3.    Rs 12000
  4.     none of these
 Discuss Question
Answer: Option A. -> Rs 10000
Question 14.

  1. The difference between the compound interest and simple interest on a certain sum at 6.25% p.a. for 2 years is Rs 70.31. What is the sum?

  1.    Rs14000  approx
  2.    Rs 16000  approx
  3.    Rs 18000   approx
  4.    Rs 20000   approx
 Discuss Question
Answer: Option C. -> Rs 18000   approx
Question 15.

  1. A money lender lends out a part of Rs 3364 at 5% compound interest for 3 years and the rest also at 5% compound interest, but for 5 years. If the final amount in both the cases is same, what is the amount lent out for 5 years?

  1.    Rs 1200
  2.    Rs1400
  3.    Rs 1600
  4.    Rs 1800
 Discuss Question
Answer: Option C. -> Rs 1600
Question 16.

  1. The population of a town increased by 5% of what it had been at the beginning of each year. If the population was 441000 in 1997, find the population in 1995.

  1.    400000
  2.    410000
  3.    420000
  4.    430000
 Discuss Question
Answer: Option A. -> 400000
Question 17.

  1. Calculate the compound interest on Rs 1875 for 3 years if the rates of interest per annum are 5%, 6\(\frac{2}{3}\)% and 8\(\frac{1}{3}\)% respectively.

  1.    Rs 300
  2.    Rs 350
  3.    Rs 400
  4.    Rs 450
 Discuss Question
Answer: Option C. -> Rs 400
Question 18.

  1. Mr. Sundaram takes a loan of Rs 1200 to be paid back after 1 year. He is to pay interest either at 5% p.a. compounded annually or at 4% p.a. compounded six monthly. Which option is better for him and by how much?

  1.    2nd option , Rs 11
  2.    2nd option , Rs 11.50
  3.    1st  option , Rs 11
  4.    1st  option , Rs 11.50
 Discuss Question
Answer: Option B. -> 2nd option , Rs 11.50
Question 19.

  1. Rajan borrowed Rs 4000 at 5% p.a. compound interest. After 2 years, he repaid Rs 2210 and after 2 more years, the balance with interest What was the total amount that he paid as interest?

  1.    Rs 613.50
  2.    Rs 635.50
  3.    Rs 675.50
  4.     nnone of these
 Discuss Question
Answer: Option B. -> Rs 635.50
Question 20.
  1. Indu gave Bindu Rs 1250 on compound interest for 2 years at 4% per annum. How much loss would Indu have suffered had she given it to Bindu for 2 years at 4% per annum simple interest?

  1.    Rs 2
  2.    Rs 3
  3.    Rs 4
  4.    none of these
 Discuss Question
Answer: Option A. -> Rs 2
The given problem involves finding the loss suffered by Indu if she had given Rs 1250 to Bindu on simple interest for two years at a rate of 4% per annum.
To solve this problem, we need to first calculate the amount that Bindu would receive on simple interest.
Simple Interest (SI) formula: SI = Prt/100, where P is the principal amount, r is the rate of interest, and t is the time period.
Here, P = Rs 1250, r = 4%, and t = 2 years.
SI = (1250 * 4 * 2)/100 = Rs 100
Therefore, Bindu would receive Rs 1350 at the end of 2 years on simple interest.
Now, to calculate the loss suffered by Indu, we need to find the difference between the amount given to Bindu on simple interest and the amount that she would have received on compound interest.
Compound Interest (CI) formula: A = P(1 + r/100)^t, where A is the amount after t years, P is the principal amount, r is the rate of interest, and t is the time period.
Here, P = Rs 1250, r = 4%, and t = 2 years.
A = 1250(1 + 4/100)^2 = Rs 1369.04
Loss suffered by Indu = CI - SI
= Rs 1369.04 - Rs 1350
= Rs 19.04
Therefore, Indu would suffer a loss of Rs 19.04 if she had given Rs 1250 to Bindu on simple interest instead of compound interest.
However, the question asks for the amount of loss suffered by Indu, which is not given as an option. The closest option is Option A, which states that the loss suffered is Rs 2. This is incorrect, as we have calculated the loss to be Rs 19.04.
If you think the solution is wrong then please provide your own solution below in the comments section .

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