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Quantitative Aptitude > Interest

COMPOUND INTEREST MCQs

Total Questions : 262 | Page 10 of 27 pages
Question 91. A sum of money becomes eight times of itself in 3 years at compound interest. The rate of interest per annum is
  1.    10%
  2.    100%
  3.    20%
  4.    80%
 Discuss Question
Answer: Option B. -> 100%
Answer: (b)Let the principal be x and the rate of compound interest be r% per annum. Then,$8x = x(1 + r/100)^3$8 = $(1 + r/100)^3$$2^3 = (1 + r/100)^3$2 = $1 + r/100 ⇒ r/100 = 1 ⇒ r = 100%$Using Rule 8,If a sum becomes 'n' times of itself in 't' years on compound interest, then R% = $[n^{1/t} - 1] × 100%$
Question 92. A sum of money becomes double in 3 years at compound interest compounded annually. At the same rate, in how many years will it become four times of itself ?
  1.    7.5 years
  2.    4 years
  3.    6.4 years
  4.    6 years
 Discuss Question
Answer: Option D. -> 6 years
Answer: (d)A = P$(1 + R/100)^T$Let P. Rs., A = Rs.22 = 1$(1 + R/100)^3$On squaring both sides.4 = 1$(1 + R/100)^6$Time = 6 yearsUsing Rule 11,Here, $x = 2, n_1 = 3, y = 4, n_2$ = ?$x^{1/n_1} = y^{1/n_2}$$2^{1/3} = 4^{1/n_2}$$2^{1/3} = (2^2)^{1/n_2}$$2^{1/3} = 2^{2/n_2}$$1/3 = 2/n_2$$n_2$ = 6 Years
Question 93. A sum of money at compound interest doubles itself in 15 years. It will become eight times of itself in
  1.    60 years
  2.    45 years
  3.    54 years
  4.    48 years
 Discuss Question
Answer: Option B. -> 45 years
Answer: (b)A = P$(1 + R/100)^T$2 = 1$(1 + R/100)^15$Cubing on both sides, we have8 = 1$(1 + R/100)^45$Required time = 45 yearsUsing Rule 5,Here, m = 2, t = 15 yearsIt becomes 8 times = $2^3$ timesin t × n years= 15 × 3 = 45 years
Question 94. A sum of money becomes 1.331 times in 3 years as compound interest. The rate of interest is
  1.    50%
  2.    8%
  3.    10%
  4.    7.5%
 Discuss Question
Answer: Option C. -> 10%
Answer: (c)If principal = Rs.1000, amount = Rs.1331A = P$(1 + R/100)^T$$1331/1000 = (1 + R/100)^3$$(11/10)^3 = (1 + R/100)^3$$1 + R/100 = 11/10$$R/100 = 1/10$R = $1/10 × 100$ = 10%Using Rule 8,If a sum becomes 'n' times of itself in 't' years on compound interest, then R% = $[n^{1/t} - 1] × 100%$
Question 95. At what rate percent per annum of compound interest, will a sum of money become four times of itself in two years ?
  1.    20%
  2.    100%
  3.    50%
  4.    75%
 Discuss Question
Answer: Option B. -> 100%
Answer: (b)A = P$(1 + R/100)^T$4 = $(1 + R/100)^2$1 + $R/100$ = 2$R/100$ = 1 ⇒ R = 100%Using Rule 8,Here, n = 4, t = 2 yearsR% = $(n^{1/t} - 1)$ × 100%= $((4)^{1/2} - 1)$ × 100% = 100%
Question 96. If the amount is 3$3/8$ times the sum after 3 years at compound interest compounded annually, then the rate of interest per annum is
  1.    33$1/3$%
  2.    25%
  3.    16$2/3$%
  4.    50%
 Discuss Question
Answer: Option D. -> 50%
Answer: (d)A = P$(1 + R/100)^T$$27/8x = x(1 + R/100)^3$$(3/2)^3 = (1 + R/100)^3$$1 + R/100 = 3/2$$R/100 = 3/2 - 1 = 1/2$R = $1/2$ × 100 ⇒ R = 50%Using Rule 8,n= $27/8$, t = 3 yearsR% = $(n^{1/t} - 1) × 100%$= $((27/8)^{1/3} - 1) × 100%$= $[(3/2) - 1]$ × 100% ⇒ R% = 50%
Question 97. A sum of money at compound interest amounts to thrice itself in 3 years. In how many years will it be 9 times itself ?
  1.    3 years
  2.    9 years
  3.    6 years
  4.    27 years
 Discuss Question
Answer: Option C. -> 6 years
Answer: (c)A = P$(1 + R/100)^T$Let P = Rs.1, then A = Rs.33 = 1$(1 + R/100)^3$On squaring both sides,9 = 1$(1 + R/100)^6$Time = 6 yearsUsing Rule 11,Here, $x = 3, n_1 = 3, y = 9, n_2$ = ?Using, $x^{1/n_1} = y^{1/n_2}$$(3)^{1/3} = (9)^{1/n_2}$$3^{1/3} = (3^2)^{1/n_2}$$3^{1/3} = 3^{2/n_2}$$1/3 = 2/n_2 ⇒ n_2$ = 6 years
Question 98. A sum of money doubles itself in 4 years at compound interest. It will amount to 8 times itself at the same rate of interest in :
  1.    24 years
  2.    18 years
  3.    16 years
  4.    12 years
 Discuss Question
Answer: Option D. -> 12 years
Answer: (d)A sum of Rs.x becomes Rs.2x in 4 years.Similarly, Rs.2x will become 2 × 2x= Rs.4x in next 4 years and Rs.4x will become2 × 4x = Rs.8x in yet another 4 years.So, the total time = 4 + 4 + 4 = 12 yearsUsing Rule 5,A certain sum becomes 'm' times of itself in 't' years on compound interest then the time it will take to become mn times of itself is t × n years.
Question 99. A builder borrows Rs.2550 to be paid back with compound interest at the rate of 4% per annum by the end of 2 years in two equal yearly instalments. How much will each instalment be ?
  1.    Rs.1283
  2.    Rs.1352
  3.    Rs.1275
  4.    Rs.1377
 Discuss Question
Answer: Option B. -> Rs.1352
Answer: (b)A = Rs.2550R = 4% per annumn = 2 yearsLet each of the two equal instalments be xPresent worth = $\text"Instalment"/(1 + r/100)^n$$P_1 = x/(1 + 4/100)^1 = x/{1 + 1/25} = x/{26/25}$or $P_1 = 25/26x$Similarly,$P_2 = (25/26)^2x = 625/676x$$P_1 + P_2$ = A$25/26x + 625/676x$ = 2550${(650 + 625)x}/676 = 2550$$1275/676x = 2550$x = 2550 $× 676/1275$ ⇒ x = Rs.1352Using Rule 9,If a sum 'P' is borrowed at r% annual compound interest which is to be paid in 'n' equal annual installments including interest, then(i) For n = 2, Each annual installment= $p/{(100/{100 + r}) + (100/{100 + r})^2$(ii) For n = 3, Each annual installment= $p/{(100/{100 + r}) + (100/{100 + r})^2 + (100/{100 + r})^3$
Question 100. Mr. Dutta desired to deposit his retirement benefit of Rs. 3 lakhs partly to a post office and partly to a bank at 10% and 6% interests respectively. If his monthly interest income was Rs. 2000, then the difference of his deposits in the post office and in the bank was :
  1.    Rs.1,00,000
  2.    Rs.50,000
  3.    Nil
  4.    Rs.40,000
 Discuss Question
Answer: Option C. -> Nil
Answer: (c)Using Rule 1,Let the amount deposited in Post Office be Rs.x lakhs.Amount deposited in bank = Rs.(3 - x) lakhsAccording to the question,${x × 10 × 1}/{100 × 12} + {(3 - x) × 6 × 1}/{100 × 12}$= $2000/100000 = 1/50$10x + 18 - 6x= $1/50$ × 1200 = 244x = 24 - 18 = 6x = $6/4$ = Rs.$3/2$ lakhs∴ Required difference = 0

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