Compound Interest

1. In how many years will Rs. 2,000 amount to Rs. 2,420 at 10% per annum compound interest? [SSC Grade 2000]

(a) 3

(b)  

(c) 2

(d)

Answer: (c)

Explanation:

n = 2 years


2. The rate of interest at which an amount of Rs. 1800 on compound interest becomes Rs. 1984. 50 in 2 years is: [CDS 1998]

(a) 3%

(b) 4%

(c) 5%

(d) 6%

Answer: (c)

Explanation:

r = 5%


3. Vijay deposited Rs. 15000 in ICICI Bank, which pays him 10% interest per annum compounded half-yearly, then the amount received by Vijay at the end of the year will be:

(a) Rs. 16,500

(b) Rs. 16,525. 50

(c) Rs. 16,537. 50

(d) Rs. 18,150

Answer: (c)

Explanation:

R=10% p. a=5% per half-year, T=1 year, P=Rs. 15000

=Rs. 16537. 50


4. Find the compound interest on Rs. 10500 at 8% per annum for 1 year 3 months, compounded annually?

(a) Rs. 1,066. 80

(b) Rs. 1,154. 20

(c) Rs. 1,048. 10

(d) Rs. 1,124. 50

Answer: (a)

Explanation:

P = Rs. 10500, R = 8% per annum, T =

= Rs. 11566. 80

Compound Interest = Rs. [11566. 80-10500] = Rs. 1066. 80


5. What is the difference between compound interest on Rs. 5,000 for 1 year 6 month at 4% per annum according as the interest is compounded yearly or half-yearly? [SSC 2000]

(a) Rs. 2. 00

(b) Rs. 3. 06

(c) Rs. 8. 30

(d) Rs. 4. 80

Answer: (a)

Explanation:

Hence, the difference =Rs. 2


6. A sum of money is borrowed and paid back in three annual installment of Rs. 3430 each allowing p. a compound interest. The sum borrowed was:

(a) Rs. 7,500

(b) Rs. 7,620

(c) Rs. 7,560

(d) Rs. 7,260

Answer: (b)

Explanation:

The sum borrowed was = Rs. 7620.


7. If the difference between the compound interest, compounded every six months, and the simple interest on a certain sum of money at the rate of 12% per annum for one year is Rs. 36, the sum is: [SSC Grade 2000]

(a) Rs. 10,000

(b) Rs. 12,000

(c) Rs. 15,000

(d) Rs. 9,000

Answer: (a)

Explanation:

=10,000


8. Sam invested Rs. 15000 at 10% per annum foryears. If the interest is compounded yearly, then the amount received by sam at the end of the year will be:

(a) Rs. 7,643

(b) Rs. 5,304

(c) Rs. 4,760

(d) Rs. 4,400

Answer: (b)

Explanation:

C. I. when interest is compounded yearly


9. A sum of money doubles itself at(c) I in 15 years. In how many years will it become eight times?

(a) 30 years

(b) 45 years

(c) 60 years

(d) 75 years

Answer: (b)

Explanation:

n=45 years.


10. A certain amount of money is invested at the simple interest of 15% per annum. If it had been invested at compound interest, an extra interest of Rs. 450 would have been obtained in the obtained in the second year. What must be the amount invested? [Bank 2001]

(a) Rs. 30,000

(b)  Rs. 15,000

(c) Rs. 20,000

(d) Rs. 10,000

Answer: (c)

Explanation:

Solve by options.

Which is 450 more than SI.

(OR)

Alternate method:

=Rs. 20000

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