Compound Interest problems
- 1. Two payments of $10,000 each must be made one year and four years from now. If money can earn 9% compounded monthly, what single payment two years from now would be equivalent to the two scheduled payments?
Options- A. 19296
- B. 19396
- C. 19496
- D. 19596 Discuss
Correct Answer: 19296
Explanation:
The single equivalent payment will be PV + FV.
FV = Future value of $10,000, 12 months later
$10,000 *(1.0075)/12
$10,938.07
PV= Present value of $10,000, 24 months earlier
$10,000/(1.0075)24
$8358.31
The equivalent single payment is
$10,938.07 + $8358.31 = $19,296.38
- 2. The population of a rural region is expected to fall by 2% per year for the next 10 years. If the region?s current population is 100,000, what is the expected population 10 years from now?
Options- A. 81707
- B. 91707
- C. 61707
- D. 71707 Discuss
Correct Answer: 81707
Explanation:
i=j/m
FV = PV(1 + i)^n
- 3. If Rs. 10000 amounts to Rs. 11664 invested in compound interest(compounded annually) for two years then the annual rate of compound interest is
Options- A. 10%
- B. 9%
- C. 8%
- D. 6% Discuss
Correct Answer: 8%
- 4. At what rate of compound interest per annum will a sum of Rs 20000 become Rs 25088 in 2 years?
Options- A. 24 percent
- B. 8 percent
- C. 12 percent
- D. 16 percent Discuss
Correct Answer: 12 percent
- 5. In what time(in years) will Rs. 8000 amount to Rs. 9261 at 5% per annum, compounded annually?
Options- A. 3
- B. 3.5
- C. 4
- D. 4.5 Discuss
Correct Answer: 3
- 6. The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 5% per annum is Rs 45. The sum is
Options- A. Rs 36000
- B. Rs 72000
- C. Rs 18000
- D. Rs 54000 Discuss
Correct Answer: Rs 18000
- 7. A sum of money is invested at 20% compound interest (compounded annually). It would fetch Rs. 723 more if interest is compounded half-yearly. The sum
Options- A. Rs.15,000
- B. Rs.30,000
- C. Rs.20,000
- D. Rs.7,500 Discuss
Correct Answer: Rs.30,000
- 8. What is the compound interest earned on Rs 80,000 at 40% per annum in 1 year compounded quarterly?
Options- A. 28317
- B. 37128
- C. 18732
- D. 21387 Discuss
Correct Answer: 37128
- 9. The amount received at 10% per annum compound interest after 3 yrs is Rs 10,648. What was the principal (in Rs)?
Options- A. 8000
- B. 9000
- C. 8500
- D. 7500 Discuss
Correct Answer: 8000
- 10. A bank offers 15% compound interest per half year. A customer deposits Rs 8800 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 8315
- B. Rs 2079
- C. Rs 4158
- D. Rs 1039 Discuss
Correct Answer: Rs 4158
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