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Question 1
How much interest does an amount of Rs. 1000000 earn @4% compounded annually for 3 years?
Question 2
The difference in compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 54. What is the principal amount if the rate is 3% p.a.?
Rs. 60000.
Rs. 70000.
Rs. 50000.
Rs. 80000.
Ans: a
The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$. So Principal = $(Difference × 10000)/(rate × rate)$ = $(54 × 10000)/(3 × 3)$ = Rs. 60000.
Question 3
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?
Rs. 6180.
Rs. 6280.
Rs. 6080.
Rs. 6380.
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 4
An amount P is invested for 1 year @3% 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?
Question 5
The difference in compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 98. What is the principal amount if the rate is 7% p.a.?
Rs. 20000.
Rs. 30000.
Rs. 25000.
Rs. 40000.
Ans: a
The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$. So Principal = $(Difference × 10000)/(rate × rate)$ = $(98 × 10000)/(7 × 7)$ = Rs. 20000.
This Blog Post/Article "Compound Interest Quiz Set 005" 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