Compound Interest Quiz Set 011

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Question 1

How much interest does an amount of Rs. 8000000 earn @3% compounded annually for 3 years?

 A

Rs. 741816.

 B

Rs. 741916.

 C

Rs. 741716.

 D

Rs. 742016.

Soln.
Ans: a

Amount A = 8000000 × $(1 + 3/100)^3$, which equals 8000000 × $103/100$ × $103/100$ × $103/100$ = 8 × 103 × 103 × 103 = Rs. 8741816. So interest = A - P = 8741816 - 8000000 = Rs. 741816.


Question 2

What is the amount receivable on Rs. 2000000 after 9 months, invested at a rate of 28% compounded quarterly?

 A

Rs. 2450086.

 B

Rs. 2450186.

 C

Rs. 2449986.

 D

Rs. 2450286.

Soln.
Ans: a

In this case r = $28/4$% and n = 3 because compounding is quarterly, and in 9 months there are three quarters. So A = 2000000 × $(1 + 7/100)^3$, which equals 2 × 107 × 107 × 107, i.e., Rs. 2450086.


Question 3

The interest earned by an amount of Rs. 90000 @5% compounded annually is Rs. 9225. What is the period in years?

 A

2 years.

 B

3 years.

 C

1 year.

 D

1/2 year.

Soln.
Ans: a

The amount is 90000 + 9225. So 99225 = 90000 × $(105/100)^n$. So $99225/90000$ = $(105/100)^n$, which can be put in the form $(105/100)^2$ = $(105/100)^n$, so n = 2 years.


Question 4

The amount of Rs. 8000000 earns an interest of Rs. 741816 @3% compounded annually. What is the investment period in years?

 A

3 years.

 B

2 years.

 C

1 year.

 D

1/2 year.

Soln.
Ans: a

The amount is 8000000 + 741816. So 8741816 = 8000000 × $(103/100)^n$. So $8741816/8000000$ = $(103/100)^n$, which can be put in the form $(103/100)^3$ = $(103/100)^3$, so n = 3 years.


Question 5

A bank offers an interest rate of 5% compounded annually. Initially I deposit Rs. 50000 in the bank under this scheme. After 1 year I again deposit Rs 50000. What is the total amount that I will get after 2 years?

 A

Rs. 107625.

 B

Rs. 107725.

 C

Rs. 107525.

 D

Rs. 107825.

Soln.
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 = 5 and P = 50000 and cancelling 10000, we get 5 × 105 × 205 = Rs. 107625.


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This Blog Post/Article "Compound Interest Quiz Set 011" 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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