Compound Interest problems
- 1. In what time will Rs.1000 become Rs.1331 at 10% per annum compounded annually?
Options- A. 2years
- B. 3years
- C. 4years
- D. 5years Also asked in: Bank Exams, Bank PO
Correct Answer: 3years
Explanation:
Principal = Rs.1000;
Amount = Rs.1331;
Rate = Rs.10%p.a.
Let the time be n years.Then
[1000(1+10/100)?n;]
= 1331.
= (1331/1000)
= (11/10)³
Therefore n = 3 years.
- 2. Determine the nominal rate of interest if: The periodic rate is 1.75% per quarter.
Options- A. 7%
- B. 8%
- C. 9%
- D. 10% Also asked in: Bank Exams, Bank PO
Correct Answer: 7%
Explanation:
j=mi
- 3. A $1000 face value Series S50 compound interest Canada Savings Bond (CSB) was presented to a credit union branch for redemption.What amount did the owner receive if the redemption was requested on:January 17, 2001?
Options- A. 1206
- B. 1306
- C. 1406
- D. 1506 Also asked in: Bank Exams, Bank PO
Correct Answer: 1306
Explanation:
I = ptr
Therefore, the total amount the owner received on January 17, 2001 was
$1295.57 + $10.47 = $1306.04
- 4. 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.8830
- C. Rs.8500
- D. Rs.8820 Also asked in: Bank Exams, Bank PO
Correct Answer: Rs.8820
Explanation:
Amount
=Rs.[8000x(1+5/100)²]
= Rs.[8000 x 21/20x21/20]
= Rs.8820.
- 5. 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.53
- D. Rs.54 Also asked in: Bank Exams, Bank PO
Correct Answer: Rs.51.25
Explanation:
Sum =Rs.(50 x 100/2x5)
= Rs. 500.
Amount
=[Rs.500x(1+5/100)²]
=Rs(500x21/20x21/20).
=Rs. 551.25
C.I
= Rs. (551.25 - 500)
= Rs. 51.25
- 6. The difference between the compound interest and simple interest on an amount of Rs.15000 for two years is Rs.96. what is the rate of interest per annum
Options- A. 8
- B. 10
- C. 12
- D. 13 Also asked in: Bank Exams, Bank PO
Correct Answer: 8
Explanation:
[15000 *(1+r/100)^2-15000]-(15000*r*2)/100=96
r=8
- 7. If you deposit $5000 into an account paying 6% annual interest compounded monthly, how long until there is $8000 in the account?
Options- A. 6.9
- B. 7.9
- C. 8.9
- D. 9.9 Also asked in: Bank Exams, Bank PO
Correct Answer: 7.9
Explanation:
FV=P(1+r/n)^nt
- 8. Calculate the future value of $3,000 invested at 7% for 5 years
Options- A. 4207.66
- B. 5207
- C. 4376
- D. 5687 Also asked in: Bank Exams, Bank PO
Correct Answer: 4207.66
Explanation:
F=P(1+i)^n
- 9. Assume that money can be invested at 8% compounded quarterly,which is larger,$2500 now or $3800 in 5 years?
Options- A. 1557.29
- B. 2557.29
- C. 2567
- D. 2457 Also asked in: Bank Exams, Bank PO
Correct Answer: 2557.29
Explanation:
First find the present value of $3800,then compare present values:
M = p(1+i/4)^4n
- 10. The periodic interest rate corresponding to: 9.75% compounded semiannually
Options- A. 4.875
- B. 3.785
- C. 4.865
- D. 4.975 Also asked in: Bank Exams, Bank PO
Correct Answer: 4.875
Explanation:
i=j/m
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