Top 100+ Compound Interest Questions and Answers - 1
Question: 1
What will be the difference between simple and compound interest @ 10% per annum on a sum of Rs. 1000 after 4 years?
(A) Rs. 31
(B) Rs. 40.40
(C) Rs. 64.10
(D) Rs. 74.20
Ans: C
S.I. = Rs. $$({1000 × 10 × 4} / {100})$$ = Rs. 400.
C.I. = Rs. $$[1000 × (1 + {10}/{100})^4 - 1000]$$ = Rs. 464.10.
Difference = Rs. (464.10 – 400) = 64.10.
Question: 2
The simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is
(A) Rs. 1550
(B) Rs. 1650
(C) Rs. 1700
(D) Rs. 1750
Ans: D
C.I. = Rs. $$[4000 × (1 + {10} / {100})^2 - 4000]$$
= Rs. $$(4000 × {11} /{10} × {11} / {10} – 4000)$$ = Rs. 840.
∴ Sum = Rs. $$({420 × 100} / {3 × 8})$$ = Rs. 1750.
Question: 3
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is
(A) 6%
(B) 6.07%
(C) 6.09%
(D) 6.10%
Ans: C
Amount of Rs. 100 for 1 year when compounded half yearly
= Rs. $$[100 × (1 + {3} /{100})^2]$$ = Rs. 106.09.
∴ Effective rate = (106.09 – 100)% = 6.09%.
Question: 4
The difference between simple interest and compound interest on Rs. 1200 for one year at 10% per annum reckoned half yearly is
(A) Rs. 3
(B) Rs. 3.25
(C) Rs. 3.75
(D) Rs. 4
Ans: A
S.I. = Rs. $$({1200 × 10 × 1} / {100})$$ = Rs. 120.
C.I. = Rs. $$[1200 × (1 + 5 / 100)^2 - 1200]$$ = Rs. 123.
Difference = Rs. (123 – 120) = Rs. 3.
Question: 5
What will be the compound interest accrued on an amount of Rs. 10000 % 20 p.c.p.a. in 2 years if the interest is compound half yearly?
(A) Rs. 4600
(B) Rs. 4641
(C) Rs. 4680
(D) Rs. 4820
Ans: B
P = Rs. 10000, R = 20%, p.a. = 10% per half year.
T = 2 years = 4 half years.
Amount = Rs. [10000 × $$(1 + {10} / {100})^4$$]
= Rs. $$(10000 × {11} / {10} × {11} / {10} × {11} / {10} × {11] / {10})$$ = Rs. 14641.
∴ C.I. = Rs. (14641 – 10000) = Rs. 4641.
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