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### Question 1

The compound amount after 2 years on a principal of Rs. P is same as that on a principal of Rs. (404 - P) after 3 years, then what is P if the rate of interest is 2% p.a. compounded yearly?

### Question 2

The difference between compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 216. What is the rate p.a. if principal is Rs. 60000?

**A**

6%.

**B**

8%.

**C**

7%.

**D**

9%.

**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 × $√{216/60000}$ = 6%.

### Question 3

An amount P is invested for 1 year @4% 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?

### Question 4

What is the difference between the simple interest and compound interest at the rate of 4% for 1 year? The compounding is half-yearly, and the principal is Rs. 50000.

**A**

Rs. 20.

**B**

Rs. 120.

**C**

Rs. 70.

**D**

Rs. 220.

**Soln.**

**Ans: a**

The simple interest SI = (P × r)/100 = (50000 × 4)/100 = Rs. 2000. Compound interest will have half interest rate and n = 2. By shortcut formula, we have CI = ${P × R × (R + 200)}/10000$ = ${50000 × 2 × (2 + 200)}/10000$ = Rs. 2020. The difference = Rs. 20.

### Question 5

The difference in compound interest(annual compounding) and simple interest for a period of 2 years is Rs. 512. What is the principal amount if the rate is 8% p.a.?

**A**

Rs. 80000.

**B**

Rs. 90000.

**C**

Rs. 70000.

**D**

Rs. 100000.

**Soln.**

**Ans: a**

The shortcut formula for the difference between compound and simple interest over a period of 2 years is $Difference = Principal × (\text"rate"/100)^2$. So Principal = $(Difference × 10000)/(rate × rate)$ = $(512 × 10000)/(8 × 8)$ = Rs. 80000.

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This Blog Post/Article "Compound Interest Quiz Set 015" by Parveen (Hoven) is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Updated on 2020-01-14.