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### Question 1

The compound interest on a certain sum of money at 6% for a period of 2 years is Rs. 8652. What is the SI on this sum if the rate is halved, and time doubled?

**A**

Rs. 8400.

**B**

Rs. 8500.

**C**

Rs. 8300.

**D**

Rs. 8600.

**Soln.**

**Ans: a**

The shortcut formula is CI = Pr(r + 200)/10000. Putting CI = 8652, r = 6, we get 8652 = ${P × 6 × (6 + 200)}/10000$. We can solve it to get P = Rs. 70000. The SI = P × (2 × t) × (r / 200) = P × t × (r / 100). Putting t = 2, r = 6 and P = 70000, we get SI = Rs. 8400.

### Question 2

How much interest does an amount of Rs. 30000 earn @8% compounded annually for 2 years?

### Question 3

The difference between compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 28. What is the rate p.a. if principal is Rs. 70000?

**A**

2%.

**B**

4%.

**C**

3%.

**D**

5%.

**Soln.**

**Ans: a**

If d is the difference, r is the rate and P is the principal, then the shortcut formula for the difference between compound and simple interest over a period of 2 years is d = P × $(r/100)^2$. So rate = 100 × $√{d/P}$ = 100 × $√{28/70000}$ = 2%.

### Question 4

An amount P is invested for 1 year @2% p.a. The simple interest is Rs. 3000. What would be the compound interest on the same amount, at the same rate and for the same time, compounded annually?

### Question 5

An amount P is invested for 2 years @7% 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?

**A**

Rs. 6210.

**B**

Rs. 6310.

**C**

Rs. 6110.

**D**

Rs. 6410.

**Soln.**

**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, ${{(50 × SI)/r} × r × (200 + r)}/10000$ = ${SI × (r + 200)}/200$ = ${6000 × (7 + 200)}/200$ = Rs. 6210.

This Blog Post/Article "Compound Interest Quiz Set 010" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Updated on 2020-01-21. Published on: 2016-04-30