Compound Interest problems
- 1. Josh borrowed $250 from his mother to buy an electric scooter. Josh will pay her back in 1 year with 3% simple annual interest. How much interest will Josh pay?
Options- A. 7.50
- B. 8.50
- C. 9.50
- D. 10.50 Also asked in: Bank Exams, Bank PO
Correct Answer: 7.50
Explanation:
I=prt/100
- 2. The effective annual rate of interest corresponding to nominal rate of 6% per annum payable half yearly is
Options- A. 5%
- B. 6%
- C. 7%
- D. 6.09% Also asked in: Bank Exams, Bank PO
Correct Answer: 6.09%
Explanation:
amount=[100(1+3/100)^2]=Rs.106.09
- 3. Find the time to double your investment at 6%
Options- A. 10years
- B. 11years
- C. 12years
- D. 13years Also asked in: Bank Exams, Bank PO
Correct Answer: 12years
Explanation:
M=p(1+i)^n
- 4. Mr. and Mrs. Espedido?s property taxes, amounting to $2450, are due on July 1.What amount should the city accept if the taxes are paid eight months in advance and the city can earn 6% compounded monthly on surplus funds?
Options- A. 2354.17
- B. 2354
- C. 2376
- D. 2389 Also asked in: Bank Exams, Bank PO
Correct Answer: 2354.17
Explanation:
i=j/m
PV= FV(1+ i)^-n
- 5. 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. 17296
- B. 13296
- C. 19296
- D. 15296 Also asked in: Bank Exams, Bank PO
Correct Answer: 19296
Explanation:
i=j/m
- 6. 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 Also asked in: Bank Exams, Bank PO
Correct Answer: 81707
Explanation:
i=j/m
FV = PV(1 + i)^n
- 7. Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quartely.
Options- A. Rs.2522
- B. Rs.2422
- C. Rs.3522
- D. Rs.2322 Also asked in: Bank Exams, Bank PO
Correct Answer: Rs.2522
Explanation:
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.
- 8. What is the difference between the compound interests on Rs. 5000 for 112 years at 4% per annum compounded yearly and half-yearly?
Options- A. Rs.3.06
- B. Rs.2.04
- C. Rs.3.65
- D. Rs.5.40 Also asked in: Bank Exams, Bank PO
Correct Answer: Rs.2.04
Explanation:
C.I. when interest compounded yearly
=Rs.5034
C.I. when interest iscompounded half-yearly
= Rs. 5306.04
Difference = Rs. (5306.04 - 5304) = Rs. 2.04
- 9. The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:
Options- A. 3years
- B. 2years
- C. 4years
- D. 6years Also asked in: Bank Exams, Bank PO
Correct Answer: 2years
Explanation:
Amount = Rs. (30000 + 4347) = Rs. 34347.
Let the time be n years.
Then, 30000*(1+7/100)^n=34347
n= 2 years
- 10. What is the rate of compound interest? I. The principal was invested for 4 years. II. The earned interest was Rs. 1491.
Options- A. I alone sufficient while II alone not sufficient to answer
- B. II alone sufficient while I alone not sufficient to answer
- C. Either I or II alone sufficient to answer
- D. Either I or II alone sufficient to answer Also asked in: Bank Exams, Bank PO
Correct Answer: Either I or II alone sufficient to answer
Explanation:
Let Principal = Rs. P and Rate = R% p.a. Then,
Amount=
C.I =
Clearly, it does not give the answer
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