A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. Find the rate of interest per annum. MCQ with Answer and Explanation

Question

A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. Find the rate of interest per annum.

A. 7%

B. 6%

C. 4%

D. 5%

Answer: Option D

Solution (By JKExamLibrary)

Interest earned in the 4th year = 840 - 800 = Rs. 40. Rate of interest = (Interest / Principal at start of year) * 100 = (40 / 800) * 100 = 5%.

This question belongs to: Maths Compound Interest

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Question #1

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The effective rate of interest for 10% per annum compounded half-yearly is:

A. 10.10%

B. 10.50%

C. 10.75%

D. 10.25%

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Correct Answer: Option D

Explanation:
Effective rate = (1.05)² − 1 = 1.1025 − 1 = 0.1025 = 10.25%.

This question belongs to: Maths Compound Interest

Question #2

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A sum of money placed at compound interest doubles itself in 5 years. In how many years will it amount to eight times itself?

A. 10 years

B. 20 years

C. 15 years

D. 25 years

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Correct Answer: Option C

Explanation:
A sum becomes 2 times in 5 years. It will become 4 (2^2) times in 2 * 5 = 10 years. It will become 8 (2^3) times in 3 * 5 = 15 years.

This question belongs to: Maths Compound Interest

Question #3

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The compound interest on Rs. 3000 for 3 years at 5% per annum is:

A. Rs. 472.50

B. Rs. 475.00

C. Rs. 472.875

D. Rs. 473.00

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Correct Answer: Option C

Explanation:
A = 3000 × (1.05)³ = 3000 × 1.157625 = 3472.875, CI = 3472.875 − 3000 = Rs. 472.875.

This question belongs to: Maths Compound Interest

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