# Compound Interest Quiz Set 009

### 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.

Updated on 2020-02-07. Published on: 2016-04-30

Posted by Parveen(Hoven),
Aptitude Trainer