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Quantitative Aptitude — Compound Interest
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Quantitative Aptitude — Compound Interest

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8 mins
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10
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Quantitative Aptitude — Compound Interest — Questions with Answers Open after you finish the quiz — all 10 questions, with answers and explanations.
Q1. What will be the Compound Interest (CI) on a sum of Rs. 10000 for 2 years at a rate of 10% per annum, compounded annually?
  1. Rs. 2000
  2. Rs. 2100
  3. Rs. 2200
  4. Rs. 2300
Show answer
Answer: B. Rs. 2100
Formula for Amount (A) = P(1 + R/100)^T Here, Principal (P) = Rs. 10000, Rate (R) = 10% per annum, Time (T) = 2 years. Step 1: Calculate the Amount (A). A = 10000(1 + 10/100)^2 A = 10000(1.1)^2 A = 10000 * 1.21 A = Rs. 12100 Step 2: Calculate the Compound Interest (CI). CI = A - P CI = 12100 - 10000 CI = Rs. 2100
Q2. What will be the Amount if Rs. 8000 is invested at 5% per annum Compound Interest for 3 years, compounded annually?
  1. Rs. 9200
  2. Rs. 9261
  3. Rs. 9300
  4. Rs. 9400
Show answer
Answer: B. Rs. 9261
Formula for Amount (A) = P(1 + R/100)^T Here, Principal (P) = Rs. 8000, Rate (R) = 5% per annum, Time (T) = 3 years. Step 1: Calculate the Amount (A). A = 8000(1 + 5/100)^3 A = 8000(1.05)^3 A = 8000 * 1.157625 A = Rs. 9261
Q3. The difference between Compound Interest (CI) and Simple Interest (SI) on a sum of Rs. 5000 for 2 years at 8% per annum is:
  1. Rs. 24
  2. Rs. 32
  3. Rs. 40
  4. Rs. 48
Show answer
Answer: B. Rs. 32
Formula for the difference between CI and SI for 2 years = P(R/100)^2 Here, Principal (P) = Rs. 5000, Rate (R) = 8% per annum. Step 1: Calculate the difference. Difference = 5000 * (8/100)^2 Difference = 5000 * (0.08)^2 Difference = 5000 * 0.0064 Difference = Rs. 32
Q4. Find the Compound Interest (CI) on Rs. 16000 for 1 year at 10% per annum, compounded half-yearly.
  1. Rs. 1600
  2. Rs. 1620
  3. Rs. 1640
  4. Rs. 1680
Show answer
Answer: C. Rs. 1640
When compounded half-yearly, the rate is halved and time is doubled. New Rate (R') = R/2 = 10%/2 = 5% per half-year. New Time (T') = T * 2 = 1 year * 2 = 2 half-years. Formula for Amount (A) = P(1 + R'/100)^T' Here, Principal (P) = Rs. 16000. Step 1: Calculate the Amount (A). A = 16000(1 + 5/100)^2 A = 16000(1.05)^2 A = 16000 * 1.1025 A = Rs. 17640 Step 2: Calculate the Compound Interest (CI). CI = A - P CI = 17640 - 16000 CI = Rs. 1640
Q5. A certain sum of money yields a Compound Interest of Rs. 1324 in 3 years at 10% per annum, compounded annually. What is the principal sum?
  1. Rs. 3600
  2. Rs. 3800
  3. Rs. 4000
  4. Rs. 4200
Show answer
Answer: C. Rs. 4000
Formula for Compound Interest (CI) = P[(1 + R/100)^T - 1] Here, CI = Rs. 1324, Rate (R) = 10% per annum, Time (T) = 3 years. Step 1: Substitute the values into the formula. 1324 = P[(1 + 10/100)^3 - 1] 1324 = P[(1.1)^3 - 1] 1324 = P[1.331 - 1] 1324 = P[0.331] Step 2: Solve for Principal (P). P = 1324 / 0.331 P = Rs. 4000
Q6. At what rate of Compound Interest per annum will a sum of Rs. 10000 amount to Rs. 12100 in 2 years, compounded annually?
  1. 8%
  2. 9%
  3. 10%
  4. 11%
Show answer
Answer: C. 10%
Formula for Amount (A) = P(1 + R/100)^T Here, Amount (A) = Rs. 12100, Principal (P) = Rs. 10000, Time (T) = 2 years. Step 1: Substitute the values into the formula. 12100 = 10000(1 + R/100)^2 12100/10000 = (1 + R/100)^2 1.21 = (1 + R/100)^2 Step 2: Take the square root of both sides. sqrt(1.21) = 1 + R/100 1.1 = 1 + R/100 Step 3: Solve for Rate (R). R/100 = 1.1 - 1 R/100 = 0.1 R = 0.1 * 100 R = 10%
Q7. What is the difference between Compound Interest (CI) and Simple Interest (SI) on a principal of Rs. 12000 at 10% per annum for 3 years?
  1. Rs. 360
  2. Rs. 372
  3. Rs. 384
  4. Rs. 396
Show answer
Answer: B. Rs. 372
Formula for the difference between CI and SI for 3 years = P(R/100)^2 * (3 + R/100) Here, Principal (P) = Rs. 12000, Rate (R) = 10% per annum. Step 1: Calculate the difference. Difference = 12000 * (10/100)^2 * (3 + 10/100) Difference = 12000 * (0.1)^2 * (3 + 0.1) Difference = 12000 * 0.01 * 3.1 Difference = 120 * 3.1 Difference = Rs. 372
Q8. Find the Compound Interest (CI) on Rs. 20000 for 2 years 6 months at 10% per annum, compounded annually.
  1. Rs. 5000
  2. Rs. 5200
  3. Rs. 5410
  4. Rs. 5500
Show answer
Answer: C. Rs. 5410
For compound interest with fractional time, calculate for full years first, then simple interest for the remaining fraction on the amount. Here, Principal (P) = Rs. 20000, Rate (R) = 10% per annum, Time (T) = 2 years 6 months. Step 1: Calculate Amount for 2 full years. Formula for Amount (A) = P(1 + R/100)^T A_2years = 20000(1 + 10/100)^2 A_2years = 20000(1.1)^2 A_2years = 20000 * 1.21 A_2years = Rs. 24200 Step 2: Calculate Simple Interest for the remaining 6 months (1/2 year) on A_2years. Formula for Simple Interest (SI) = (P * R * T) / 100 SI_6months = (24200 * 10 * (6/12)) / 100 SI_6months = (24200 * 10 * 0.5) / 100 SI_6months = 24200 * 5 / 100 SI_6months = Rs. 1210 Step 3: Calculate Total Compound Interest (CI). Total CI = (A_2years - P) + SI_6months Total CI = (24200 - 20000) + 1210 Total CI = 4200 + 1210 Total CI = Rs. 5410
Q9. In how many years will a sum of Rs. 6250 amount to Rs. 7290 at 8% per annum Compound Interest, compounded annually?
  1. 1 year
  2. 1.5 years
  3. 2 years
  4. 2.5 years
Show answer
Answer: C. 2 years
Formula for Amount (A) = P(1 + R/100)^T Here, Amount (A) = Rs. 7290, Principal (P) = Rs. 6250, Rate (R) = 8% per annum. Step 1: Substitute the values into the formula. 7290 = 6250(1 + 8/100)^T 7290/6250 = (1.08)^T 729/625 = (108/100)^T 729/625 = (27/25)^T Step 2: Express both sides with the same base. We know that 27^2 = 729 and 25^2 = 625. So, (27/25)^2 = (27/25)^T Step 3: Equate the powers to find Time (T). T = 2 years
Q10. Calculate the Compound Interest (CI) on Rs. 16000 for 9 months at 20% per annum, compounded quarterly.
  1. Rs. 2400
  2. Rs. 2480
  3. Rs. 2522
  4. Rs. 2560
Show answer
Answer: C. Rs. 2522
When compounded quarterly, the rate is divided by 4 and time is multiplied by 4. New Rate (R') = R/4 = 20%/4 = 5% per quarter. New Time (T') = T * 4 = 9 months = (9/12) years = (3/4) years. So, T' = (3/4) * 4 = 3 quarters. Formula for Amount (A) = P(1 + R'/100)^T' Here, Principal (P) = Rs. 16000. Step 1: Calculate the Amount (A). A = 16000(1 + 5/100)^3 A = 16000(1.05)^3 A = 16000 * 1.157625 A = Rs. 18522 Step 2: Calculate the Compound Interest (CI). CI = A - P CI = 18522 - 16000 CI = Rs. 2522
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