Compound Interest - General Questions (2)

At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

A.	6%
B.	6.5%
C.	7%
D.	7.5%

Answer: Option A

Explanation:

Let the rate be R% p.a.

Then, 1200 x		1 +	R		2	= 1348.32
			100

		1 +	R		2	=	134832	=	11236
			100				120000		10000

		1 +	R		2	=		106		2
			100					100

1 +	R	=	106
	100		100

R = 6%

10.

What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12 p.c.p.a.?

A.	Rs. 9000.30
B.	Rs. 9720
C.	Rs. 10123.20
D.	Rs. 10483.20
E.	None of these

Answer: Option C

Explanation:

Amount

= Rs.		25000 x		1 +	12		3
					100

= Rs.		25000 x	28	x	28	x	28
			25		25		25

= Rs. 35123.20

C.I. = Rs. (35123.20 - 25000) = Rs. 10123.20

11.

The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:

A.	2
B.	2 1/2
C.	3
D.	4

Answer: Option A

Explanation:

Amount = Rs. (30000 + 4347) = Rs. 34347.

Let the time be n years.

Then, 30000		1 +	7		n	= 34347
			100

		107		n	=	34347	=	11449	=		107		2
		100				30000		10000			100

n = 2 years.

12.

What is the difference between the compound interests on Rs. 5000 for 1 1-div-1by2 years at 4% per annum compounded yearly and half-yearly?

A.	Rs. 2.04
B.	Rs. 3.06
C.	Rs. 4.80
D.	Rs. 8.30

Answer: Option A

Explanation:

C.I. when interest
compounded yearly

= Rs.

5000 x

1 +

1 +

x 4

100

= Rs.		5000 x	26	x	51
			25		50

= Rs. 5304.

C.I. when interest is
compounded half-yearly

= Rs.		5000 x		1 +	2		3
					100

= Rs.		5000 x	51	x	51	x	51
			50		50		50

= Rs. 5306.04

Difference = Rs. (5306.04 - 5304) = Rs. 2.04

13.

There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?

A.	Rs. 2160
B.	Rs. 3120
C.	Rs. 3972
D.	Rs. 6240
E.	None of these

Answer: Option C

Explanation:

Let P = Rs. 100. Then, S.I. Rs. 60 and T = 6 years.

R =		100 x 60		= 10% p.a.
		100 x 6

Now, P = Rs. 12000. T = 3 years and R = 10% p.a.

C.I.

= Rs.		12000 x			1 +	10		3	- 1
						100

= Rs.		12000 x	331
			1000

= 3972.

14.

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:

A.	625
B.	630
C.	640
D.	650

Answer: Option A

Explanation:

Let the sum be Rs. x. Then,

C.I. =		x		1 +	4		2	- x		=		676	x	- x		=	51	x.
					100							625					625

S.I. =		x x 4 x 2		=	2x	.
		100			25

	51x	-	2x	= 1
	625		25

x = 625.

15.

A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:

A.	Rs. 120
B.	Rs. 121
C.	Rs. 122
D.	Rs. 123

Answer: Option B

Explanation:

Amount

= Rs.

1600 x

1 +

+ 1600 x

1 +

2 x 100

= Rs.		1600 x	41	x	41	+ 1600 x	41
			40		40		40

= Rs.		1600 x	41		41	+ 1
			40		40

= Rs.		1600 x 41 x 81
		40 x 40

= Rs. 3321.

C.I. = Rs. (3321 - 3200) = Rs. 121

Compound Interest - General Questions (2)

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