Question 1

If the amount received at the end of 2nd and 3rd year at Compound Interest on a certain Principal is Rs 1,800, and Rs 1,926 respectively, what is the rate of interest?

Accepted Answer

7%

Question 2

Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quartely.

Accepted Answer

Principal = Rs.16,000; Time=9 months = 3 quarters; Amount =Rs.[16000x(1+5/100)³] =[16000x21/20x21/20x21/20] = Rs.18522. C.I = Rs.(18522 - 16000) = Rs.2522.

Question 3

What is the difference between the compound interests on Rs. 5000 for 1 1/2 years at 4% per annum compounded yearly and half-yearly?

Accepted Answer

C.I. when interest compounded yearly=rs.[5000*(1+4/100)(1+1/2*4/100)] = Rs. 5304. C.I. when interest is compounded half-yearly=rs.5000(1+2/100)^3 = Rs. 5306.04 Difference = Rs. (5306.04 - 5304) = Rs. 2.04

Question 4

The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:

Accepted Answer

Amount = Rs. (30000 + 4347) = Rs. 34347. Let the time be n years. Then, 30000*(1+7/100)^n=34347 n= 2 years

Question 5

What is the rate of compound interest? I. The principal was invested for 4 years. II. The earned interest was Rs. 1491.

Accepted Answer

Either I or II alone sufficient to answer

Question 6

If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time

Accepted Answer

Sum = Rs.(50*100)/2*5=Rs.500 Amount=Rs.[500*(1+5/100)2] = Rs. 551.25 C.I = Rs.(551.25-500)= Rs.51.25

Question 7

The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned half-yearly is

Accepted Answer

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 8

The difference between compound interest and simple interest on a certain sum of money for 2 years at 5% per annum is Rs. 41. What is the sum of money?

Accepted Answer

Rs.16400

Question 9

An amount of money was lent for 3 years. What will be the difference between the simple and the compound interest earned on it at the same rate? I. The rate of interest was 8 p.c.p.a. II. The total amount of simple interest was Rs. 1200

Accepted Answer

Given: T = 3 years. I. gives: R = 8% p.a. II. gives: S.I. = Rs. 1200. Thus, P = Rs. 5000, R = 8% p.a. and T = 3 years. Difference between C.I. and S.I. may be obtained. So, the correct answer is (D).

Question 10

If you deposit $6500 into an account paying 8% annual interest compounded monthly, how much money will be in the account after 7 years?

Accepted Answer

FV=P(1+r/n)^nt

Question 11

How much money would you need to deposit today at 9% annual interest compounded monthly to have $12000 in the account after 6 years?

Accepted Answer

FV=P(1+r/n)^nt

Question 12

You deposit $300 in a savings account that pays 4% simple annual interest. Find your account balance after 9 months.

Accepted Answer

A = P + Prt

Question 13

Simon deposits $400 in an account that pays 3% interest compounded annually. What is the balance of Simon’s account at the end of 2 years?

Accepted Answer

I=Prt I=12 Balance = P +Prt 412 Find the balance at the end of the second year. I = Prt=12.36 Balance =P + Prt 424.36

Question 14

Jackie deposits $325 in an account that pays 4.1% interest compounded annually. How much money will Jackie have in her account after 3 years?

Accepted Answer

A=P(1+r)^t

Question 15

Find the annual interest rate that produces $100,000 from $20,000 in 15 years.

Accepted Answer

l=(F/P)^1/n-1

Question 16

Calculate the effective interest rate compounded quarterly of a 13% annual rate.

Accepted Answer

E=(1+i/n)^n-1

Question 17

Calculate the effective interest rate of a 10% annual rate compounded continuously.

Accepted Answer

E=e^i-1

Question 18

An amount of 5,000 is invested at a fixed rate of 8 per cent per annum. What amount will be the value of the investment in five years time, if the interest is compounded annually

Accepted Answer

The only part of this type of calculation that needs particular care is that concerning the interest rate. The formula assumes that r is a proportion, and so, in this case: r = 0.08 In addition, we have P = 5,000 and n = 5, so: V = P(1 + r)5 = 5,000 x (1 + 0.08)5 = 5,000 x 1.469328 = 7,346.64 Thus the value of the investment will be 7,346.64

Question 19

Give an investment of $13200,compound amount of $22680.06 invested for 8 years,what is the interest rate if interest rate is compounded anually?

Accepted Answer

M = p(1+i)^n

Question 20

Example:Given an amount needed(future value) of $3300 in 4 years at an interest rate of 11% compounded anually,Find the present value and the amount of interest earned

Accepted Answer

M=P(1+i)^n

Compound Interest Questions