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- Question
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
Options- A. 6.06%
- B. 6.07%
- C. 6.08%
- D. 6.09%
- Correct Answer
- 6.09%
ExplanationTags: Bank Exams, Bank POAmount of Rs. 100 for 1 year
when compounded half-yearly] = Rs. [ 100 x ❨ 1 + 3 ❩ 2 ] = Rs. 106.09 100 ∴ Effective rate = (106.09 - 100)% = 6.09%
Compound Interest problems
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- 1. Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit?
Options- A. Rs. 8600
- B. Rs. 8620
- C. Rs. 8820
- D. None of these Discuss
Correct Answer: Rs. 8820
Explanation:
Amount = Rs. [ 8000 x ❨ 1 + 5 ❩ 2 ] 100 = Rs. ❨ 8000 x 21 x 21 ❩ 20 20 = Rs. 8820. - 2. 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?
Options- A. Rs. 51.25
- B. Rs. 52
- C. Rs. 54.25
- D. Rs. 60 Discuss
Correct Answer: Rs. 51.25
Explanation:
Sum = Rs. ❨ 50 x 100 ❩ = Rs. 500. 2 x 5 Amount = Rs. [ 500 x ❨ 1 + 5 ❩ 2 ] 100 = Rs. ❨ 500 x 21 x 21 ❩ 20 20 = Rs. 551.25 ∴ C.I. = Rs. (551.25 - 500) = Rs. 51.25
- 3. The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned half-yearly is:
Options- A. Rs. 2.50
- B. Rs. 3
- C. Rs. 3.75
- D. Rs. 4
- E. None of these Discuss
Correct Answer: Rs. 3
Explanation:
S.I. = Rs ❨ 1200 x 10 x 1 ❩ = Rs. 120. 100 C.I. = Rs. [ 1200 x ❨ 1 + 5 ❩ 2 - 1200 ] = Rs. 123. 100 ∴ Difference = Rs. (123 - 120) = Rs. 3.
- 4. A and B can together finish a work 30 days. They worked together for 20 days and then B left. After another 20 days, A finished the remaining work. In how many days A alone can finish the work?
Options- A. 40
- B. 50
- C. 54
- D. 60 Discuss
Correct Answer: 60
Explanation:
(A + B)'s 20 day's work = ❨ 1 x 20 ❩ = 2 . 30 3 Remaining work = ❨ 1 - 2 ❩ = 1 . 3 3 Now, 1 work is done by A in 20 days. 3 Therefore, the whole work will be done by A in (20 x 3) = 60 days.
- 5. A is 30% more efficient than B. How much time will they, working together, take to complete a job which A alone could have done in 23 days?
Options- A. 11 days
- B. 13 days
- C.
20 3 days 17 - D. None of these Discuss
Correct Answer: 13 days
Explanation:
Ratio of times taken by A and B = 100 : 130 = 10 : 13.Suppose B takes x days to do the work.
Then, 10 : 13 :: 23 : x ⟹ x = ❨ 23 x 13 ❩ ⟹ x = 299 . 10 10 A's 1 day's work = 1 ; 23 B's 1 day's work = 10 . 299 (A + B)'s 1 day's work = ❨ 1 + 10 ❩ = 23 = 1 . 23 299 299 13 Therefore, A and B together can complete the work in 13 days.
- 6. What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12 p.c.p.a.?
Options- A. Rs. 9000.30
- B. Rs. 9720
- C. Rs. 10123.20
- D. Rs. 10483.20
- E. None of these Discuss
Correct Answer: Rs. 10123.20
Explanation:
Amount = Rs. [ 25000 x ❨ 1 + 12 ❩ 3 ] 100 = Rs. ❨ 25000 x 28 x 28 x 28 ❩ 25 25 25 = Rs. 35123.20 ∴ C.I. = Rs. (35123.20 - 25000) = Rs. 10123.20
- 7. The compound interest on a certain sum for 2 years at 10% per annum is Rs. 525. The simple interest on the same sum for double the time at half the rate percent per annum is:
Options- A. Rs. 400
- B. Rs. 500
- C. Rs. 600
- D. Rs. 800 Discuss
Correct Answer: Rs. 500
Explanation:
Let the sum be Rs. P.Then, [ P ❨ 1 + 10 ❩ 2 - P ] = 525 100 ⟹ P [ ❨ 11 ❩ 2 - 1 ] = 525 10 ⟹ P = ❨ 525 x 100 ❩ = 2500. 21 ∴ Sum = Rs . 2500.
So, S.I. = Rs. ❨ 2500 x 5 x 4 ❩ = Rs. 500 100 - 8. At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?
Options- A. 6%
- B. 6.5%
- C. 7%
- D. 7.5% Discuss
Correct Answer: 6%
Explanation:
Let the rate be R% p.a.Then, 1200 x ❨ 1 + R ❩ 2 = 1348.32 100 ⟹ ❨ 1 + R ❩ 2 = 134832 = 11236 100 120000 10000 ∴ ❨ 1 + R ❩ 2 = ❨ 106 ❩ 2 100 100 ⟹ 1 + R = 106 100 100 ⟹ R = 6%
- 9. What is the difference between the compound interests on Rs. 5000 for 1½ years at 4% per annum compounded yearly and half-yearly?
Options- A. Rs. 2.04
- B. Rs. 3.06
- C. Rs. 4.80
- D. Rs. 8.30 Discuss
Correct Answer: Rs. 2.04
Explanation:
C.I. when interest
compounded yearly= Rs. [ 5000 x ❨ 1 + 4 ❩ x ❨ 1 + ½ x 4 ❩ ] 100 100 = Rs. ❨ 5000 x 26 x 51 ❩ 25 50 = Rs. 5304. C.I. when interest is
compounded half-yearly= Rs. [ 5000 x ❨ 1 + 2 ❩ 3 ] 100 = Rs. ❨ 5000 x 51 x 51 x 51 ❩ 50 50 50 = Rs. 5306.04 ∴ Difference = Rs. (5306.04 - 5304) = Rs. 2.04
- 10. A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:
Options- A. Rs. 120
- B. Rs. 121
- C. Rs. 122
- D. Rs. 123 Discuss
Correct Answer: Rs. 121
Explanation:
∴ C.I. = Rs. (3321 - 3200) = Rs. 121Amount = Rs. [ 1600 x ❨ 1 + 5 ❩ 2 + 1600 x ❨ 1 + 5 ❩ ] 2 x 100 2 x 100 = Rs. [ 1600 x 41 x 41 + 1600 x 41 ] 40 40 40 = Rs. [ 1600 x 41 ❨ 41 + 1 ❩ ] 40 40 = Rs. [ 1600 x 41 x 81 ] 40 x 40 = Rs. 3321.
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