A sum of money doubles in 6 years at compound interest. In how many years will it become 8 times? MCQ with Answer and Explanation
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Question #1
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The value of a machine depreciates at 20% per annum. Its present value is Rs. 32000. What was its value 2 years ago?
Correct Answer: Option B
Explanation:
Value 2 years ago = Present value / (1 − 0.2)² = 32000 / 0.64 = 50000.
Value 2 years ago = Present value / (1 − 0.2)² = 32000 / 0.64 = 50000.
This question belongs to:
Maths
Compound Interest
Question #2
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The difference between simple interest and compound interest on a certain sum of money for 3 years at 5% per annum is Rs. 244. Find the sum.
Correct Answer: Option B
Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 244 = P * (5/100)^2 * (3 + 5/100) => 244 = P * (1/400) * (3.05) => P = (244 * 400) / 3.05 = 97600 / 3.05 = Rs. 32000.
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 244 = P * (5/100)^2 * (3 + 5/100) => 244 = P * (1/400) * (3.05) => P = (244 * 400) / 3.05 = 97600 / 3.05 = Rs. 32000.
This question belongs to:
Maths
Compound Interest
Question #3
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The effective annual rate for 7% per annum compounded half-yearly is:
Correct Answer: Option C
Explanation:
Half-yearly rate 3.5%, (1.035)² = 1.071225, effective = 7.1225% ≈ 7.12%.
Half-yearly rate 3.5%, (1.035)² = 1.071225, effective = 7.1225% ≈ 7.12%.
This question belongs to:
Maths
Compound Interest
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