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Quantitative Aptitude > Interest

SIMPLE & COMPOUND INTEREST MCQs

Compound Interest, Simple Interest, Interest (combined)


Total Questions : 1171 | Page 61 of 118 pages
Question 601.
On a sum of money, the simple interest for 2 years is Rs. 320, while the compound interest is Rs. 340, the rate of interest being the same in both the cases. The rate of interest is:
  1.    15%
  2.    14.25%
  3.    12.5%
  4.    10.5%
 Discuss Question
Answer: Option C. -> 12.5%

Answer : Option C

Explanation :

--------------------------------------------------------------------------------------
Solution 1
---------------------------------------------------------------------------------------
Simple interest for 2 years is Rs. 320
=> Simple interest for first year = 320/2 = 160
=> Similarly, simple interest for second year is also 160
Compound Interest for first year = 160
Compound Interest for second year = 340-160 = 180
we can see that compound Interest for second year is more than
simple interest for second year by 180-160 = 20
i.e., Rs.20 is the simple interest on Rs.160 for 1 year
$MF#%\text{R} = \dfrac{100 \times \text{SI}}{\text{PT}} = \dfrac{100 \times 20}{160 \times 1} = 12.5\%$MF#%
--------------------------------------------------------------------------------------
Solution 2
---------------------------------------------------------------------------------------
The difference between compound interest and simple interest on Rs. P for 2 years at R% per annum
$MF#% = \dfrac{\text{R} \times \text{SI}}{2 \times 100} $MF#%

Question 602.
The least number of complete years in which a sum of money put out at 20% compound interest will be more than doubled is
  1.    5
  2.    4
  3.    4
  4.    2
 Discuss Question
Answer: Option B. -> 4

Answer : Option B

Explanation :

Let principal be P
$MF#%\begin{align}&\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^\text{T} > 2P\\\\ &\text{P}\left(1 + \dfrac{20}{100}\right)^\text{T} > 2P\\\\ &\left(1 + \dfrac{20}{100}\right)^\text{T} > 2\\\\ &\left(\dfrac{120}{100}\right)^\text{T} > 2\\\\ &1.2^\text{T} > 2\end{align}$MF#%
Now let's find out the minimum value of T for which the above equation becomes true
If T = 1, 1.2T = 1.21 = 1.2
If T = 2, 1.2T = 1.22 ≈ 1.4
If T = 3, 1.2T = 1.23 ≈ 1.7
If T = 4, 1.2T = 1.24 ≈ 2.07 which is greater than 2
Hence T = 4
i.e., required number of years = 4


Question 603.
The difference between the compound interest and the simple interest
accrued on an amount of Rs. 18,000 in 2 years was Rs. 405. What was the
rate of interest p.c.p.a. ?



  1.    12
  2.    15
  3.    18
  4.    21
 Discuss Question
Answer: Option B. -> 15


Let the rate be R% p.a.
[ 18000 ( 1 + ( R / 100 )^2 ) - 18000 ] - ((18000 * R * 2) / 100 ) = 405
18000 [ ( 100 + (R / 100 )^2 / 10000) - 1 - (2R / 100 ) ] = 405
18000[( (100 + R )^ 2 - 10000 - 200R) / 10000 ] = 405
9R^2 / 5 = 405
R^2 =((405 * 5 ) / 9) = 225
R = 15.
Rate = 15%.



Question 604.
A tree increases annually by 1⁄5 th of its height. If its height today is 50 cm, what will be the height after 2 years?
  1.    64 cm
  2.    72 cm
  3.    66 cm
  4.    84 cm
 Discuss Question
Answer: Option B. -> 72 cm

Answer : Option B

Explanation :

This problem is similar to the problems we saw in compound interest.
We can use the formulas of compound interest here as well.
$MF#%\text{Rate of increase = }\dfrac{1}{5} \times 100 = 20\%\\\\ \text{Height after 2 years = }\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^\text{T} = 50\left(1 + \dfrac{20}{100}\right)^2 \\\\ = 50\left(1 + \dfrac{1}{5}\right)^2 = 50\left(\dfrac{6}{5}\right)^2 = \dfrac{50 \times 6\times 6}{5\times 5} = 2 \times 6 \times 6 = 72\text{ cm}$MF#%


Question 605.

A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:


  1.    Rs. 120
  2.    Rs. 121
  3.    Rs. 122
  4.    Rs. 123
 Discuss Question
Answer: Option B. -> Rs. 121

Amount = Rs. A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1600 x A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1 + 5 A Bank Offers 5% Compound Interest Calculated On Half-yearly... 2 + 1600 x A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1 + 5 A Bank Offers 5% Compound Interest Calculated On Half-yearly... A Bank Offers 5% Compound Interest Calculated On Half-yearly... 2 x 100 2 x 100 = Rs. A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1600 x 41 x 41 + 1600 x 41 A Bank Offers 5% Compound Interest Calculated On Half-yearly... 40 40 40 = Rs. A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1600 x 41 A Bank Offers 5% Compound Interest Calculated On Half-yearly... 41 + 1 A Bank Offers 5% Compound Interest Calculated On Half-yearly... A Bank Offers 5% Compound Interest Calculated On Half-yearly... 40 40 = Rs. A Bank Offers 5% Compound Interest Calculated On Half-yearly... 1600 x 41 x 81 A Bank Offers 5% Compound Interest Calculated On Half-yearly... 40 x 40 = Rs. 3321.

A Bank Offers 5% Compound Interest Calculated On Half-yearly... C.I. = Rs. (3321 - 3200) = Rs. 121


Question 606.
The difference between simple interest and compound on Rs. 900 for one year at 10% per annum reckoned half-yearly is:
  1.    Rs. 3
  2.    Rs. 2.25
  3.    Rs. 4.5
  4.    Rs. 4
 Discuss Question
Answer: Option B. -> Rs. 2.25

Answer : Option B

Explanation :

$MF#%\text{Simple Interest = }\dfrac{\text{PRT}}{100} = \dfrac{900 \times 10 \times 1}{100} = \text{ Rs. }90$MF#%
Amount after 1 year on Rs.900 at 10% per annum when interest is reckoned half-yearly
$MF#%= \text{P}\left(1 + \dfrac{\text{(R/2)}}{100}\right)^\text{2T} = 900\left(1 + \dfrac{(10/2)}{100}\right)^{2 \times 1} = 900\left(1 + \dfrac{5}{100}\right)^{2} = 900\left(\dfrac{105}{100}\right)^{2}\\\\ = \dfrac{900\times 105 \times 105}{100 \times 100} = \text{Rs. 992.25}$MF#%
Compound Interest = 992.25 - 900 = 92.25
Required difference between simple interest and compound interest = 92.25 - 90 = Rs.2.25


Question 607.
A sum of money becomes Rs. 2200 after three years and Rs. 4400 after six years on compound interest. The sum is
  1.    Rs. 1400
  2.    Rs. 1100
  3.    Rs. 1000
  4.    Rs. 1200
 Discuss Question
Answer: Option B. -> Rs. 1100

Answer : Option B

Explanation :

Let the sum be P and rate of interest be R% per annum.
Amount after 3 years = 2200
$MF#%\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^\text{T} = 2200\\\\ \text{P}\left(1 + \dfrac{\text{R}}{100}\right)^3 = 2200 \quad \color{#F00}{\text{--- ( 1)}}$MF#%
Amount after 6 years = 4400
$MF#%\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^\text{T} = 4400\\\\ \text{P}\left(1 + \dfrac{\text{R}}{100}\right)^6 = 4400 \quad \color{#F00}{\text{--- (2)}}$MF#%
$MF#%\color{#F00}{\text{(2)÷(1) =>}} \dfrac{\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^6 }{\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^3} = \dfrac{4400}{2200} = 2\\\\ => \left(1 + \dfrac{\text{R}}{100}\right)^3 = 2 \\\\ \color{#F00}{\text{(Substituting this value in equation 1) => }} \quad \text{P} \times 2 = 2200\\\\ \text{P} = \dfrac{2200}{2} = 1100$MF#%


Question 608.
At what rate of compound interest per annum will a sum of Rs. 1400 become Rs. 1573.04 in 2 years?
  1.    4%
  2.    5%
  3.    6%
  4.    8%
 Discuss Question
Answer: Option C. -> 6%

Answer : Option C

Explanation :

Let the rate be R% per annum
$MF#%
\begin{align}&\text{P}\left(1 + \dfrac{\text{R}}{100}\right)^\text{T} = 1573.04\\\\ &1400\left(1 + \dfrac{\text{R}}{100}\right)^2 = 1573.04\\\\ &\left(1 + \dfrac{\text{R}}{100}\right)^2 = \dfrac{1573.04}{1400} = \dfrac{157304}{140000} = \dfrac{11236
}{10000}\\\\&\left(1 + \dfrac{\text{R}}{100}\right) = \sqrt{\dfrac{11236}{10000}} = \dfrac{\sqrt{11236}}{\sqrt{10000}} =\dfrac{106}{100} \\\\\ &\dfrac{\text{R}}{100} = \dfrac{106}{100} - 1 = \dfrac{6}{100}\\\\&\text{R} = 6\%\end{align}
$MF#%


Question 609.
IF the simple interest on a sum of money at 5% per annum for 3 years is
Rs. 1200, find the compound interest on the same sum for the same period
at the same rate.



  1.    1261
  2.    1271
  3.    1281
  4.    1291
 Discuss Question
Answer: Option A. -> 1261

Clearly, Rate = 5% p.a., Time = 3 years, S.I.= Rs. 1200
So principal=Rs. [100*1200]/3*5=Rs. 8000
Amount = Rs. 8000 x [1 +5/100]^3 - = Rs. 9261
C.I. = Rs. (9261 - 8000) = Rs. 1261



Question 610.
A sum of money amounts to rs.6690 after 3 years and to rs.10,035 after 6 years on compound interest.find the sum.



  1.    4445
  2.    4450
  3.    4455
  4.    4460
 Discuss Question
Answer: Option D. -> 4460


Let the sum be Rs.P
P(1+R/100)^3=6690…(i)
P(1+R/100)^6=10035…(ii)
On dividing,we get (1+R/100)^3=10025/6690=3/2.
Substituting this value in (i),we get:
P*3/2=6690
P=(6690*2/3)=4460
Hence,the sum is Rs.4460



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