A sum of money becomes 1.44 times in 2 years at compound interest. The rate of interest is: MCQ with Answer and Explanation
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Question #1
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The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 164. What would be the simple interest on the same sum at the same rate for the same time?
Correct Answer: Option B
Explanation:
Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Simple interest rate = 5 * 2 = 10%. Given 10.25% of sum = 164 => 1% of sum = 16. Simple Interest = 10% of sum = 10 * 16 = Rs. 160.
Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Simple interest rate = 5 * 2 = 10%. Given 10.25% of sum = 164 => 1% of sum = 16. Simple Interest = 10% of sum = 10 * 16 = Rs. 160.
This question belongs to:
Maths
Compound Interest
Question #2
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What is the compound interest on Rs. 10000 for 1 year at 16% per annum, compounded half-yearly?
Correct Answer: Option C
Explanation:
Half-yearly rate = 16/2 = 8%. Time = 2 half-years. Amount = 10000 * (1 + 8/100)^2 = 10000 * 1.1664 = Rs. 11664. Compound Interest = 11664 - 10000 = Rs. 1664.
Half-yearly rate = 16/2 = 8%. Time = 2 half-years. Amount = 10000 * (1 + 8/100)^2 = 10000 * 1.1664 = Rs. 11664. Compound Interest = 11664 - 10000 = Rs. 1664.
This question belongs to:
Maths
Compound Interest
Question #3
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The compound interest on a certain sum for 2 years at 12% per annum is Rs. 1272. Find the principal sum.
Correct Answer: Option C
Explanation:
Effective rate of compound interest for 2 years at 12% = 12 + 12 + (1212)/100 = 25.44%. Given 25.44% of P = 1272 => P = 1272 / 0.2544 = Rs. 5000.
Effective rate of compound interest for 2 years at 12% = 12 + 12 + (1212)/100 = 25.44%. Given 25.44% of P = 1272 => P = 1272 / 0.2544 = Rs. 5000.
This question belongs to:
Maths
Compound Interest
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