Compound Interest problems
- 1. 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?
Options- A. 346.64
- B. 356.64
- C. 366.64
- D. 376.64 Also asked in: Bank Exams, Bank PO
Correct Answer: 366.64
Explanation:
A=P(1+r)^t
- 2. Find the annual interest rate that produces $100,000 from $20,000 in 15 years.
Options- A. 9.33%
- B. 10.33%
- C. 11.33%
- D. 12.33% Also asked in: Bank Exams, Bank PO
Correct Answer: 11.33%
Explanation:
l=(F/P)^1/n-1
- 3. Calculate the effective interest rate compounded quarterly of a 13% annual rate.
Options- A. 13.65%
- B. 14.665%
- C. 15.65%
- D. 16.65% Also asked in: Bank Exams, Bank PO
Correct Answer: 13.65%
Explanation:
E=(1+i/n)^n-1
- 4. Calculate the effective interest rate of a 10% annual rate compounded continuously.
Options- A. 9.52%
- B. 10.52%
- C. 11.52%
- D. 12.52% Also asked in: Bank Exams, Bank PO
Correct Answer: 10.52%
Explanation:
E=e^i-1
- 5. 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
Options- A. 7346.64
- B. 8346
- C. 3456
- D. 4567 Also asked in: Bank Exams, Bank PO
Correct Answer: 7346.64
Explanation:
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
- 6. 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?
Options- A. 6%
- B. 5%
- C. 7%
- D. 8% Also asked in: Bank Exams, Bank PO
Correct Answer: 7%
Explanation:
M = p(1+i)^n
- 7. 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
Options- A. 1126.19
- B. 1237
- C. 2863
- D. 1892 Also asked in: Bank Exams, Bank PO
Correct Answer: 1126.19
Explanation:
M=P(1+i)^n
- 8. Sharon Stone deposits $2000 at the end of each year in an account earning 10% compounded annually. Determine how much money she has after 25 years. How much interest did she earn?
Options- A. 146694.12
- B. 13452
- C. 18232
- D. 15627 Also asked in: Bank Exams, Bank PO
Correct Answer: 146694.12
Explanation:
S=R[(1+i)^n-1]/i
- 9. The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:
Options- A. 625
- B. 635
- C. 645
- D. 655 Also asked in: Bank Exams, Bank PO
Correct Answer: 625
Explanation:
Let the sum be Rs. x. Then
C.I=x[1+4/100)^2-x]=[626/675x-x]
S.I=x^2/25
C.I-S.I=1
- 10. The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:
Options- A. 2
- B. 3
- C. 4
- D. 5 Also asked in: Bank Exams, Bank PO
Correct Answer: 2
Explanation:
Amount = Rs. (30000 + 4347) = Rs. 34347
(1+7/100)^n=34347
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