Compound Interest Quiz Set 012

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Question 1

What is the difference between the simple interest and compound interest at the rate of 12% for 1 year? The compounding is half-yearly, and the principal is Rs. 60000.

 A

Rs. 216.

 B

Rs. 316.

 C

Rs. 116.

 D

Rs. 416.

Soln.
Ans: a

The simple interest SI = (P × r)/100 = (60000 × 12)/100 = Rs. 7200. Compound interest will have half interest rate and n = 2. By shortcut formula, we have CI = ${P × R × (R + 200)}/10000$ = ${60000 × 6 × (6 + 200)}/10000$ = Rs. 7416. The difference = Rs. 216.


Question 2

The amount of Rs. 2000000 earns an interest of Rs. 590058 @9% 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 2000000 + 590058. So 2590058 = 2000000 × $(109/100)^n$. So $2590058/2000000$ = $(109/100)^n$, which can be put in the form $(109/100)^3$ = $(109/100)^3$, so n = 3 years.


Question 3

A bank offers an interest rate of 6% compounded annually. Initially I deposit Rs. 90000 in the bank under this scheme. After 1 year I again deposit Rs 90000. What is the total amount that I will get after 2 years?

 A

Rs. 196524.

 B

Rs. 196624.

 C

Rs. 196424.

 D

Rs. 196724.

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 = 6 and P = 90000 and cancelling 10000, we get 9 × 106 × 206 = Rs. 196524.


Question 4

An amount P is invested for 2 years @5% p.a. The simple interest is Rs. 7000. What would be the compound interest on the same amount, at the same rate and for the same time, compounded annually?

 A

Rs. 7175.

 B

Rs. 7275.

 C

Rs. 7075.

 D

Rs. 7375.

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, ${{(50 × SI)/r} × r × (200 + r)}/10000$ = ${SI × (r + 200)}/200$ = ${7000 × (5 + 200)}/200$ = Rs. 7175.


Question 5

The compound amount after 3 years on a principal of Rs. x is same as that on a principal of Rs. (621 - x) after 4 years, then what is x if the rate of interest is 7% p.a. compounded yearly?

 A

Rs. 321.

 B

Rs. 421.

 C

Rs. 221.

 D

Rs. 521.

Soln.
Ans: a

We have x × $(1 + 7/100)^3$ = (621 - x) × $(1 + 7/100)^4$. Cancelling, we get x = (621 - x) × (1 + 7/100). Simplifying, x = ${621 × (100 + 7)}/(200 + 7)$, which gives x = Rs. 321.


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This Blog Post/Article "Compound Interest Quiz Set 012" 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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