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Compound Interest Quiz 1

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Compound Interest Quiz 1

shape Introduction

What is compound interest?

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.


Compound Interest is one of important topic in Quantitative Aptitude Section. In Compound Interest Quiz 1 article candidates can find questions with answer. By solving this questions candidates can improve and maintain, speed, and accuracy in the exams. Compound Interest Quiz 1 questions are very useful for different exams such as IBPS PO, Clerk, SSC CGL, SBI PO, NIACL Assistant, NICL AO, IBPS SO, RRB, Railways, Civil Services etc.


shape Q1

The CI on a certain sum of money at a certain rate per annum for two years is Rs. 4,100 and the SI on the same amount of money at the same rate for 3 years is Rs. 6000. Then the sum of money is :

    A. Rs. 40,000
    B. Rs. 36,000

    C. Rs. 42,000
    D. Rs. 50,000



SI of 2 years = Rs. 4000


Difference between SI & CI at the end of 2 years = 4100 – 4000 = Rs. 100


Rate of Interest = \(\frac {100}{2000} \times 100 = 5%\)


\(\frac {P \times 5 \times 3}{100}\) = 6000


P = Rs. 40000


shape Q2

A sum of money was lent at 10% per annum, compounded annually for 2 years. If the interest was compounded half yearly, he would have received Rs. 440.5 more. Find the sum.

    A. Rs. 96000
    B. Rs. 100000

    C. Rs. 104000
    D. Rs. 80000



Let the sum = 100


Interest if compounded annually = 100\([{(1 + \frac {10}{100})}^{2} – 1]\) = Rs. 21


Interest if compound half yearly = 100\([{(1 + \frac {5}{100})}^{4} – 1]\) = Rs. 21.550625


Difference = 0.550625


Actual sum \(\frac {440.5}{0.550625} \times 100\) = Rs. 80000


shape Q3

Rs. 12200 was partly invested in Scheme A at 10% p.a. CI for 2 years and partly in Scheme B at 10% p.a. SI for 4 years. Both the schemes give equal interests. How much was invested in Scheme A ?

    A. Rs. 7500
    B. Rs. 9000
    C. Rs. 8000
    D. Rs. 6050



Let amount invested Scheme A = x Rs


Amount invested in Scheme B = (12200 – x)


i.e, x \([{(1 + \frac {10}{100})}^{2} – 1] = \frac {(12200 – x) \times 10 \times 4}{100}\)


21x = 488000 – 40x


61x = 488000 = 8000


shape Q4

A man borrows Rs. 8000 at 20% compound rate of interest. At the end of each year he pays back Rs. 3000. How much amount should he pay at the end of the third year to clear all his dues?

    A. Rs. 5492
    B. Rs. 5552
    C. Rs. 5904
    D. Rs. 6933



At end of \({1}^{st}\) year 8000 + 1600 = 9600


Amount 9600 – 3000 = 6600


At end of \({2}^{nd}\) year 6600 + 1320 = 7920


Amount 7920 – 3000 = 4920


Amount to be paid at the end of third year = 4920 + 984 = 5904


shape Q5

A money-lender borrows money at 4% per annum and lends it at 6% per annum compound interest compounded half yearly and thus gains Rs. 209 in a year. The amount of money he borrows, is:

    A. Rs. 12,000
    B. Rs. 11,500

    C. Rs. 10,000
    D. Rs. 9,500



Let the amount borrowed = Rs 100


Interest to be paid = \(\frac {4}{100} \times 100\) = Rs. 4


Interest he gets =


His gain = 6.09 – 4 = Rs. 2.09


But actual gain = Rs. 209


Actual amount borrowed = \(\frac {209}{209} \times 100\) = Rs. 10000


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