Compound Interest Quiz

Q.1) A sum is invested for 3 years at certain CI rate annually. After 3 years, the amount earned
by him is 119.7% more. What is Rate?
[a]27%
[b]30%
[c]24%
[d]20%

[SOLUTION]

Given, amount is 11.97% more than sum

Let sum = Rs 1000
119.7
∴ A = 1000 + 1000 × 1000 = 2197
R 3
∴ 2197 = 1000 [1 + ]
100
R 3 2197 13 3
⇒ (1 + ) = =( )
100 1000 10
3
R 30 3
⇒ (1 + ) = (1 + )
100 100
⇒ R = 30%

Q.2) A sum is invested for four years at a certain rate of interest compounded annually. After
4 years, the amount increases by 107.36%. What is the rate of interest?
[a]10%
[b] 12%
[c]15%
[d]20%

[SOLUTION]

Let original amount is Rs 10000

After 4 yrs, it is Rs 20736
R 4
∴ 20736 = 10000 (1 + 100)
 R 4 12 4
⇒ (1 + ) =( )
100 10
⇒ R = 20%

Q.3) The compound interest on a certain sum for 2 years is Rs. 756 and Simple interest is Rs.
720. If the sum is invested such that the SI is Rs. 900 and the number of years is equal to the
rate percent per annum, find the rate percent?
[a]10%
[b]12%
[c]5%
[d]15%

[SOLUTION]

(CI − SI)for 2yrs = 36

It means SI on Ist year sum = Rs 36
36×100
∴R= = 10%
360
360 × 100
∴P= = 3600
10 × 1
According to question
3600ࢧ × R × R
= 900
100
R = 5%

Q.4) At What percent of Rate of CI does a Sum of Money becomes Nine fold in 2 years?
[a]200%
[b]150%
[c]100%
[d]300%

[SOLUTION]

R 2
9P = P (1 + )
100
⇒ R = 200%
Q.5) Divide Rs. 12615 between P and Q so that P’s share at the end of 6 years may equal to Q’s
share at the end of 8 years, CI being 5%.find Q’s share.
[a]Rs. 6000
[b]Rs. 5000
[c]Rs. 6500
[d]Rs. 5500

[SOLUTION]

Let P’s share = x

5 6 5 8
x [1 + ] = (12615 − x) [1 + ]
100 100
x 441
=
12615 − x 400
12615 × 441
⇒x= = Rs 6615
841
& Q′ share = Rs 6000

Q.6) Anjali invested an amount of Rs. 5800 for 2 years. At what rate of Compound Intrest will
she get an amount of Rs. 594.50 at the end of two years?
[a]5%
[b]8%
[c]7%
[d]9%

[SOLUTION]
 R 2
594.50 = 5800 [(1 + ) − 1]
100
59450 R 2
⇒ = [(1 + ) − 1]
5800 × 100 100
41 R 2
⇒ = [(1 + ) − 1]
100 100
441 400 R 2
⇒ − = [(1 + ) − 1]
400 400 100
21 2 R 2
⇒( ) − 1 = (1 + ) −1
20 100
5 2 R 2
⇒ (1 + ) = (1 + )
100 100
∴ R = 5%

Q.7) Arun and Gaurav have to clear their respective loans by paying 3 equal annual installments
of Rs. 30,000 each. Arun pays @ 10% per annum of simple interest while Gaurav pays 10% per
annum compound interest. What is the difference in their payments?
[a]Rs. 400
[b]Rs. 350
[c]Rs. 300
[d]Rs. 450

[SOLUTION]

30000(1 + 1.1 + (1.1)2 ) − 30000(1 + 1.1 + 1.2) = 300

Q.8) Anjali borrowed Rs. 62,500 from Bank to purchase one home theatre system. IF the rate
of intrest be 12% per annum compounded annually. What payment she ‘ll have to make after
2 years 3 months?
[a]Rs. 80752
[b] Rs. 88852
[c]Rs. 80852
[d]Rs. 80052

[SOLUTION]
 12 2 12
A = 62500 [(1 + ) × (1 + )]
100 100 × 4
A = Rs 80752

Q.9) Anjali took a loan of Rs. 20,000 to purchase a TV set from LG. She promised to make the
payment after three years. The company charges CI @ 10% per annum for the same. But,
suddenly the company announces the rate of interest as 15% per annum for the last one year
of the loan period. What extra amount she has to pay due to the announcement of new rate
of interest?
[a]Rs. 1210
[b] Rs. 1310
[c]Rs. 1220
[d]Rs. 1320

[SOLUTION]

10 2 15 10 3
Extra amount = 20000 [(1 + ) (1 + ) − (1 + ) ]
100 100 100
121 115 110 5
= 20000 [ ][ − ] = 200 × 121 ×
100 100 100 100
= Rs 1210

Q.10) Anjali borrowed Rs. 20,000 from her friend @ 18% per annum simple rate of interest. She
lent it to Mohit @ same rate of interest , but it is compounded annually now. Find her gain
after 2 years.
[a]Rs. 600
[b]Rs. 688
[c]Rs. 628
[d]Rs 648

[SOLUTION]

18 2 18×2
Gain for Anjali = 20000 [(1 + 100) − (1 + )]
100
324
= 20000 [ ] = Rs 648
10000

Q.11) A tree’s height increases annually by 1/8th of its height. By how much will it’s height
increase after 2.5 years, if it stands today at 10 m height?
[a]3.2 m
[b]3.44 m
[c]3.6 m
[d]3.88 m

[SOLUTION]

1 2 1
It’s height after 2.5 yrs will be = 10 [(1 + 8) × (1 + 16)]
81 17
= 10 [ × ] = 13.4472
64 16
Increase in Height = 13.4472 m − 10 m = 3.4472 m

Q.12) The difference between SI and CI on a certain sum for 3 years @10% per annum is Rs.
15.50. What will be its sum?
[a]Rs. 500
[b] Rs. 600
[c]Rs. 800
[d]Rs. 700

[SOLUTION]

1550 P(10)2 300 + 10

= [ ]
100 1002 100
15.50 × 100 × 100 × 100
⇒ =P
100 × 310
⇒ P = Rs 500

Q.13) If compound interest on a certain sum for two years @ 10% per annum is Rs 2100 then
what will be SI on same sum @ same rate for 2 years?
[a]Rs. 2500
[b]Rs. 4400
[c]Rs. 2000
[d]Rs. 2200

[SOLUTION]

CI R
= + 1
SI 200
2100 R + 200 210
⇒ = =
SI 200 200
⇒ SI = Rs 2000

Q.14) If Rs. 12,000 amounts to Rs. 13230 in 2 years @ CI. What will be the amount for Rs. 16000
in 3 years @ same rate of interest compounded annually?
[a]17642
[b]18000
[c]18522
[d]17522

[SOLUTION]

13230 R 2
= (1 + )
12000 100
21 2 R 2
⇒ ( ) = (1 + )
20 100
R = 5%
5 3
∴ required amount for Rs 16000 @ 5% = 16000 [1 + 100]
9261
= 16000 × = Rs 18522
8000

Q.15) At what time will a man receive Rs. 850 as Compound Interest on Rs. 3200 at 12.5% per
annum compounded yearly?
[a]3 years
[b]2 years
[c]2.5 years
[d] 1 year

[SOLUTION]

Given CI = Rs 1800
12.5 n
∴ 850 = 3200 [(1 + 100 ) − 1]
85 1 n
+ 1 = (1 + )
320 8
 405 1 n
⇒ = (1 + )
320 8
2
9 1 n
⇒ ( ) = (1 + )
8 8
⇒ n = 2 years

Q.16) A sum of money was invested for 14 year in scheme A which offers simple intrest @8%
per annum. The amount received from Scheme A after 14 years was then invested for two
years in Scheme B which offers CI @ 10% per annum. If the intrest received from Scheme B
was Rs. 6678, then what was the sum invested in Scheme A?
[a]Rs. 8000
[b]Rs. 10000
[c]Rs. 12500
[d]Rs. 15000

[SOLUTION]
P×8×14 212P
For CI, Amount invested = P + =
100 100
212P 10 2
∴ CI ′ ll be [(1 + 100) − 1] = 6678
100
212P 21
⇒ × = 6678
100 100
⇒ P = Rs 15000

Q.17) At what rate of CI will a sum of money become 8 times in 3 years?

[a]75%
[b]50%
[c]125%
[d]100%

[SOLUTION]

Given Amount = 8P
 R 3
∴ 8P = P [(1 + 100) ]

R 3
Or, (1 + ) = 23
100
or, R = 100%

Q.18) CI on a certain sum for 2 years is Rs. 40.80 and SI is Rs. 40 for same year. What will be the
rate of interest?
[a]2%
[b]5%
[c]4%
[d]8%

[SOLUTION]

As we know
R CI
+ 1= for 2 years
200 SI
R+200 40.80
∴ =
200 40
⇒ R = 4%

Q.19) An amount of money grows upto Rs. 4840 in 2 years and upto Rs. 5324 in 3 years on CI.
Find rate of interest.
[a]5%
[b]6%
[c]8%
[d]10%
[SOLUTION]

Clearly 5324 − 4840 = 484 will be interest on Rs 4840 for one year
484 × 100
∴R= = 10%
4840 × 1

Q.20) Rs. 4800 becomes Rs. 6000 in 4 years @ compound rate of intrest. What will be the sum
after 12 years?
[a]Rs. 9375
[b]Rs 8000
[c]Rs. 9261
[d]Rs. 9000

[SOLUTION]

R 4
6000 = 4800 [(1 + ) ]
100
5 R 4
= (1 + )
4 100
For 12 years
5 3 R 12
( ) = (1 + )
4 100
125 R 12
= (1 + )
64 100
R 12
⇒ 125 × 75 = (64 × 75) (1 + )
100
R 12
⇒ Rs 9375 = 4800 (1 + )
100
∴ Rs 4800 ’ll be Rs 9375 after 12 yrs

Q.21) A man borrows Rs. 3000 at rate of 10% compounded annually. At the end of each year,
he pays back Rs. 1000. How much amount should he pay at the end of the 3rd year to clear all
his dues?
[a]Rs. 1583
[b]Rs. 1789
[c]Rs. 1600
[d]Rs. 1683

[SOLUTION]

Let he should pay Rs x at 3rd year

10 3 10 2 10 1
∴ x = 3000 (1 + ) − 1000 (1 + ) − 1000 (1 + )
100 100 100
x = 3993 − 1210 − 1100 = 1683

Q.22) A deposits Rs. 20,000 in a private company at the rate of 16% compounded annually
whereas B deposits an equal Sum in PNB at the rate of 15% compounded half-yearly. If both
1
deposit their money for 12 years only, then the intrest A will earn is how much percent more
or less than the intrest earn by B?
[a]4.33%
[b]6.45%
[c]3.33%
[d]7.33%

[SOLUTION]

16 8
A ∶ 20000 (1 + ) (1 + ) = Rs 25056
100 100
15
B: 20000 (1 + ) ≈ Rs 24846
2 × 100
Interest earned by A = Rs 5056
& Interest earned by B = Rs 4846
5056−4846
Required % = = × 100 ≈ 4.33% (Approx)
4846

Q.23) A sum of money is lent out @20% per annum for 2 years. It would fetch Rs. 482 more if
interest is compounded half-yearly. Find the sum.
[a]Rs. 10,000
[b]Rs. 20,000
[c]Rs. 15,000
[d]Rs. 25,000

[SOLUTION]

20 4 20 2
P [1 + ] − P [1 + ] = 482
200 100
11 4 6 2
P [( ) − ( ) ] = 482
10 5
241
⇒P [ ] = 482
10000
⇒ P = Rs 20000

Q.24) A sum of amount at r% compound interest doubles in 3 years. In 9 years it will be k times
of the original principle. What is the value of k?
[a]5 times
[b]8 times
[c]9 times
[d]10 times

[MARKS] 1

[NEGATIVE MARKS] 0.25

[TAG] Quantitative Aptitude

[DIFFICULTY] Easy

[ANSWER TIME]

[QUESTION TYPE] Multi_choice

[SOLUTION]
Given
r 3
P [1 + ] = 2P
100
r 3
or (1 + ) =2 … … … … . . (i)
100
ATQ
r 9
P (1 + ) = k (p)
100
r 3 r 3 r 3
⇒ (1 + ) . (1 + ) . (1 + ) =k
100 100 100
⇒ k = 2 × 2 × 2 = 8 times

Q.25) If the rate of interest is 10% per annum and Rs. 12000 lent at the compound interest half
yearly. What is the equivalent simple rate of interest for first year?
[a]8%
[b]10%
[c]10.25%
[d]8.25%
[e]12%

[SOLUTION]

For CI
2
10
CI = 12000 [[1 + ] − 1]
100 × 2
21 21
= 12000 [ × − 1]
20 20
= Rs 1230
For equivalent SI
12000 × R × 1
1230 =
100
⇒ R = 10.25%
Or
5×5
R=(5+5+ 100 )%
R=10.25%
Q.26) A sum of money is accumulating at compound interest at a certain rate of interest. If simple
rate instead of compound interest were reckoned, the interest for the first two years would
be diminished by Rs. 20 and that for the first three years, by Rs. 61. What is the sum?
[a]Rs. 5500
[b]Rs. 6500
[c]Rs. 8000
[d]Rs. 9000

[SOLUTION]

Given
PR2
(CI − SI)2yrs = 20 ⇒ = 20 … . . (i)
1002
PR2 300 + R
(CI − SI)3yrs = 61 ⇒ ( ) = 61 … . (ii)
1002 100
From (i) & (ii)
300 + R
20 [ ] = 61
100
R= 5%
∴ from (i)
P = 8000

Q.27) A person invested a certain amount at simple interest at the rate of 6% per annum earning
Rs. 9000 as an interest at the end of three years. Had the interest been compounded every
year, how much more interest would he have earned on the same amount with the same
interest rate after three years?
[a]Rs. 9550.80
[b]Rs. 9450.80
[c]Rs. 9368.60
[d]Rs. 9230
[SOLUTION]

9000 × 100
P= = Rs 50,000
6×3
At CI
6 3
CI = 50000 [(1 + ) − 1]
100
53 3
= 50000 [( ) − 1]
50
23877
= 50000 [ ]
50 × 50 × 50
= Rs 9550.8