Compound Interest Quiz Set 009

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Question 1

Rs. 1442 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 6%?

 A

Rs. 742.

 B

Rs. 842.

 C

Rs. 642.

 D

Rs. 942.

Soln.
Ans: a

Let the parts P and (1442 - P). We have P × $(1 + 6/100)^2$ = (1442 - P) × $(1 + 6/100)^3$. Cancelling, we get P = (1442 - P) × (1 + 6/100). Simplifying, P = ${1442 × (100 + 6)}/(200 + 6)$, which gives P = Rs. 742.


Question 2

How much interest does an amount of Rs. 9000000 earn @5% compounded annually for 3 years?

 A

Rs. 1418625.

 B

Rs. 1418725.

 C

Rs. 1418525.

 D

Rs. 1418825.

Soln.
Ans: a

Amount A = 9000000 × $(1 + 5/100)^3$, which equals 9000000 × $105/100$ × $105/100$ × $105/100$ = 9 × 105 × 105 × 105 = Rs. 10418625. So interest = A - P = 10418625 - 9000000 = Rs. 1418625.


Question 3

An amount P is invested for 1 year @6% p.a. The simple interest is Rs. 4000. What would be the compound interest on the same amount, at the same rate and for the same time, compounded annually?

 A

Rs. 4000.

 B

Rs. 4100.

 C

Rs. 3900.

 D

Rs. 4200.

Soln.
Ans: a

The compound interest and simple interest are exactly same for a period of 1 year if P and r are always same.


Question 4

When a certain amount is invested in a simple interest scheme, it increases by 50% in 5 years. What will be compound interest after 3 years on an amount of Rs. 2000, at the same interest rate, and annual compounding?

 A

Rs. 662.

 B

Rs. 762.

 C

Rs. 562.

 D

Rs. 862.

Soln.
Ans: a

Simple interest on Rs. 100 in 5 years is Rs. 50, so rate is 50/5 = 10%. Compound interest for 3 years would be 2000 × $(1 + 10/100)^3$ = 2000 × $(11/10)^3$ = $(2000 × 11 × 11 × 11)/1000$ = Rs. 2662. Interest = A - P = 2662 - 2000 = Rs. 662.


Question 5

What is the amount receivable on Rs. 3000000 after 9 months, invested at a rate of 24% compounded quarterly?

 A

Rs. 3573048.

 B

Rs. 3573148.

 C

Rs. 3572948.

 D

Rs. 3573248.

Soln.
Ans: a

In this case r = $24/4$% and n = 3 because compounding is quarterly, and in 9 months there are three quarters. So A = 3000000 × $(1 + 6/100)^3$, which equals 3 × 106 × 106 × 106, i.e., Rs. 3573048.


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This Blog Post/Article "Compound Interest Quiz Set 009" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
Updated on 2019-08-18.

Posted by Parveen(Hoven),
Aptitude Trainer


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