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Question 1
What is compound interest on Rs. 60000 after 2 years, invested at a rate of 7% compounded annually?
Question 2
Rs. 1242 is divided into parts such that the compound amount on first part after 2 years is same as that for the other part after 3 years. What is the first part if the rate of interest in both the cases is 7%?
Rs. 642.
Rs. 742.
Rs. 542.
Rs. 842.
Ans: a
Let the parts P and (1242 - P). We have P × $(1 + 7/100)^2$ = (1242 - P) × $(1 + 7/100)^3$. Cancelling, we get P = (1242 - P) × (1 + 7/100). Simplifying, P = ${1242 × (100 + 7)}/(200 + 7)$, which gives P = Rs. 642.
Question 3
What is compound interest on Rs. 50000 after 2 years, invested at a rate of 5% compounded annually?
Question 4
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 5
What is the amount receivable on Rs. 5000000 after 9 months, invested at a rate of 16% compounded quarterly?
Rs. 5624320.
Rs. 5624420.
Rs. 5624220.
Rs. 5624520.
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 = 5000000 × $(1 + 4/100)^3$, which equals 5 × 104 × 104 × 104, i.e., Rs. 5624320.
This Blog Post/Article "Compound Interest Quiz Set 007" 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
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