# Compound Interest Quiz 1

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# Compound Interest Quiz 1

### 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.

### 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

A

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

### 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

D

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

### 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

C

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

### 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

C

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

### 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

C

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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