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Question 1
An amount P is invested for 2 years @6% p.a. The simple interest is Rs. 7000. What would be the compound interest on the same amount, at the same rate and for the same time, compounded annually?
Rs. 7210.
Rs. 7310.
Rs. 7110.
Rs. 7410.
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, ${{(50 × SI)/r} × r × (200 + r)}/10000$ = ${SI × (r + 200)}/200$ = ${7000 × (6 + 200)}/200$ = Rs. 7210.
Question 2
An interest rate of 18% compounded half-annually is offered by a bank. An account holder deposits Rs. 60000 in the bank under this scheme. After six months he again deposits Rs 60000. What is the total amount that he will get after 1 year?
Rs. 136686.
Rs. 154444.
Rs. 154244.
Rs. 154544.
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 = 9 and P = 60000 and cancelling 10000, we get 6 × 109 × 209 = Rs. 136686. Please note that the rate of interest will be 1/2 because the compounding is half yearly.
Question 3
A bank offers an interest rate of 9% compounded annually. Initially I deposit Rs. 20000 in the bank under this scheme. After 1 year I again deposit Rs 20000. What is the total amount that I will get after 2 years?
Rs. 45562.
Rs. 45662.
Rs. 45462.
Rs. 45762.
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 = 9 and P = 20000 and cancelling 10000, we get 2 × 109 × 209 = Rs. 45562.
Question 4
The amount of Rs. 2000000 earns an interest of Rs. 185454 @3% compounded annually. What is the investment period in years?
Question 5
What is the amount receivable on Rs. 3000000 after 9 months, invested at a rate of 16% compounded quarterly?
Rs. 3374592.
Rs. 3374692.
Rs. 3374492.
Rs. 3374792.
Ans: a
In this case r = $16/4$% and n = 3 because compounding is quarterly, and in 9 months there are three quarters. So A = 3000000 × $(1 + 4/100)^3$, which equals 3 × 104 × 104 × 104, i.e., Rs. 3374592.
This Blog Post/Article "Compound Interest Quiz Set 002" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Updated on 2020-02-07. Published on: 2016-04-30