Compound interest
Ten quantitative aptitude questions, each marked as you answer.
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₹60,000 amounts to ₹69,984 in 2 years at compound interest, compounded annually. What is the rate of interest?
Answer and working
Answer C
(1 + R/100)² = 69,984/60,000 = 1.1664, so 1 + R/100 = 1.08 and R = 8%. Dividing the interest equally between the years (simple interest) gives a wrong answer.
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What is the compound interest on ₹36,000 for 3 years at 10% per annum, compounded annually?
Answer and working
Answer A
Amount = 36,000 × (1 + 10/100)3 = ₹47,916. CI = 47,916 − 36,000 = ₹11,916.
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What is the difference between the compound interest and the simple interest on ₹46,000 for 2 years at 5% per annum?
Answer and working
Answer C
For 2 years, CI − SI = P × (R/100)² = 46,000 × (5/100)² = ₹115.
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What is the difference between the compound interest and the simple interest on ₹20,625 for 2 years at 12% per annum?
Answer and working
Answer D
For 2 years, CI − SI = P × (R/100)² = 20,625 × (12/100)² = ₹297.
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What is the compound interest on ₹50,475 for 2 years at 20% per annum, compounded annually?
Answer and working
Answer B
Amount = 50,475 × (1 + 20/100)2 = ₹72,684. CI = 72,684 − 50,475 = ₹22,209.
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₹60,000 amounts to ₹69,984 in 2 years at compound interest, compounded annually. What is the rate of interest?
Answer and working
Answer B
(1 + R/100)² = 69,984/60,000 = 1.1664, so 1 + R/100 = 1.08 and R = 8%. Dividing the interest equally between the years (simple interest) gives a wrong answer.
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₹80,000 amounts to ₹1,15,200 in 2 years at compound interest, compounded annually. What is the rate of interest?
Answer and working
Answer B
(1 + R/100)² = 1,15,200/80,000 = 1.44, so 1 + R/100 = 1.2 and R = 20%. Dividing the interest equally between the years (simple interest) gives a wrong answer.
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What is the compound interest on ₹69,600 for 2 years at 15% per annum, compounded annually?
Answer and working
Answer D
Amount = 69,600 × (1 + 15/100)2 = ₹92,046. CI = 92,046 − 69,600 = ₹22,446.
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What is the compound interest on ₹60,625 for 2 years at 4% per annum, compounded annually?
Answer and working
Answer A
Amount = 60,625 × (1 + 4/100)2 = ₹65,572. CI = 65,572 − 60,625 = ₹4,947.
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What is the difference between the compound interest and the simple interest on ₹49,800 for 2 years at 10% per annum?
Answer and working
Answer A
For 2 years, CI − SI = P × (R/100)² = 49,800 × (10/100)² = ₹498.
More quantitative aptitude: Percentages, Profit, loss and discount, Simple interest, Ratio and proportion, Averages, Problems on ages.