A sum of money invested at compound interest doubles itself in 10 years. In how many years will it become 4 times of itself? MCQ with Answer and Explanation
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Question #1
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The effective annual rate for 5% per annum compounded quarterly is:
Correct Answer: Option B
Explanation:
Quarterly rate 1.25%, (1.0125)⁴ = 1.050945, effective = 5.0945% ≈ 5.09%.
Quarterly rate 1.25%, (1.0125)⁴ = 1.050945, effective = 5.0945% ≈ 5.09%.
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 8% per annum, compounded half-yearly?
Correct Answer: Option A
Explanation:
Half-yearly rate = 8/2 = 4%. Time = 2 half-years. Amount = 10000 * (1 + 4/100)^2 = 10000 * 1.0816 = Rs. 10816. Compound Interest = 10816 - 10000 = Rs. 816.
Half-yearly rate = 8/2 = 4%. Time = 2 half-years. Amount = 10000 * (1 + 4/100)^2 = 10000 * 1.0816 = Rs. 10816. Compound Interest = 10816 - 10000 = Rs. 816.
This question belongs to:
Maths
Compound Interest
Question #3
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At what rate of compound interest per annum will a sum of Rs. 800 become Rs. 882 in 2 years?
Correct Answer: Option A
Explanation:
800 × (1 + r)² = 882 ⇒ (1+r)² = 1.1025 ⇒ 1+r = 1.05 ⇒ r = 5%.
800 × (1 + r)² = 882 ⇒ (1+r)² = 1.1025 ⇒ 1+r = 1.05 ⇒ r = 5%.
This question belongs to:
Maths
Compound Interest
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