Compound Interest problems
- 1. A sum is being lent at 20 % per annum compound interest.what is the ratio of increase in amount of 4th year to 5th year?
Options- A. 4:5
- B. 5:4
- C. 5:6
- D. can't be determined Discuss
Correct Answer: 5:6
Explanation:
- 2. The compound interest on a sum of money for 2 years is rs.832 and the simple interest on the same sum for the same period is rs.800 .the difference between the compound interest and simple interest for 3 years
Options- A. Rs.48
- B. Rs.66.56
- C. Rs.98.56
- D. None of these Discuss
Correct Answer: Rs.98.56
Explanation:
difference in C.I and S.I in 2years =Rs.32
S.I for 1year =Rs.400
S.I for Rs.400 for one year =Rs.32
rate=[100*32)/(400*1)%=8%
difference between in C.I and S.I for 3rd year
=S.I on Rs.832= Rs.(832*8*1)/100=Rs.66.56
- 3. In what time will Rs.1000 become Rs.1331 at 10% per annum compounded annually?
Options- A. 2years
- B. 3years
- C. 4years
- D. 5years Discuss
Correct Answer: 3years
Explanation:
Let P = Rs. 100. Then, S.I. Rs. 60 and T = 6 years.
R= =10% p.a
Now, P = Rs. 12000. T = 3 years and R = 10% p.a.
C.I=
=Rs.3972
- 5. On a sum of money, the simple interest for 2 years is Rs. 660,while the compound interest is Rs.696.30,the rate of interest being the same in both the cases. The rate of interest is
Options- A. 10%
- B. 11%
- C. 12%
- D. 13% Discuss
Correct Answer: 11%
Explanation:
Difference in C.I and S.I for 2 years
= Rs(696.30-660)
=Rs. 36.30.
S.I for one years = Rs330.
S.I on Rs.330 for 1 year =Rs. 36.30
Rate
= (100x36.30/330x1)%
= 11%
- 6. The difference between simple interest and compound interest of a certain sum of money at 20% per annum for 2 years is Rs. 56. Then the sum is :
Options- A. Rs. 3680
- B. Rs. 2650
- C. Rs. 1400
- D. Rs. 1170 Discuss
Correct Answer: Rs. 1400
Explanation:
We know thatThe Difference between Compound Interest and Simple Interest for n years at R rate of interest is given by
Here n = 2 years, R = 20%, C.I - S.I = 56
- 7. The population of a town was 3600 three years back. It is 4800 right now. What will be the population three years down the line, if the rate of growth of population has been constant over the years and has been compounding annually?
Options- A. Rs.600
- B. Rs,6400
- C. Rs.6500
- D. Rs.6600 Discuss
Correct Answer: Rs,6400
Explanation:
The population grew from 3600 to 4800 in 3 years. That is a growth of 1200 on 3600 during three year span.
Therefore, the rate of growth for three years has been constant.
The rate of growth during the next three years will also be the same.
Therefore, the population will grow from 4800 by = 1600
Hence, the population three years from now will be 4800 + 1600 = 6400
- 8. Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually
Options- A. Rs.512
- B. Rs.515
- C. Rs.612
- D. Rs.522 Discuss
Correct Answer: Rs.612
Explanation:
Amount
= Rs[7500x(1+4/100)²]
=Rs.(7500 * 26/25 * 26/25)
=Rs.8112
C.I
= Rs(8112 - 7500)
=Rs.612
- 9. Divide Rs. 1301 between A and B, so that the amount of A after 7 years is equal to the amount of B after 9 years, the interest being compounded at 4% per annum.
Options- A. Rs.625
- B. Rs.626
- C. Rs.286
- D. Rs.627 Discuss
Correct Answer: Rs.625
Explanation:
Let the two parts be Rs. x and Rs. (1301 - x).
=> 625x=676(1301-x)
1301x=676 x 1301x=676.
So,the parts are rs.676 and rs.(1301-676)i.e rs.676 and rs.625
- 10. A certain sum is to be divided between A and B so that after 5 years the amount received by A is equal to the amount received by B after 7 years. The rate of interest is 10%, interest compounded annually. Find the ratio of amounts invested by them.
Options- A. 121:100
- B. 125:100
- C. 100:121
- D. 100:125 Discuss
Correct Answer: 121:100
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