A sum of money placed at compound interest becomes double of itself in 8 years. In how many years will it become 16 times of itself? MCQ with Answer and Explanation
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Question #1
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The compound interest on Rs. 8000 at 10% per annum for 1 year compounded half-yearly is:
Correct Answer: Option A
Explanation:
Half-yearly rate 5%, n=2. A = 8000 × (1.05)² = 8000 × 1.1025 = 8820, CI = 8820 − 8000 = Rs. 820.
Half-yearly rate 5%, n=2. A = 8000 × (1.05)² = 8000 × 1.1025 = 8820, CI = 8820 − 8000 = Rs. 820.
This question belongs to:
Maths
Compound Interest
Question #2
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A sum of money at compound interest doubles in 4 years. In how many years will it become 8 times?
Correct Answer: Option B
Explanation:
2 times in 4 years, 8 = 2³ ⇒ 4 × 3 = 12 years.
2 times in 4 years, 8 = 2³ ⇒ 4 × 3 = 12 years.
This question belongs to:
Maths
Compound Interest
Question #3
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The compound interest on a certain sum for 2 years at 10% per annum is Rs. 420. What would be the simple interest on the same sum at the same rate for the same time?
Correct Answer: Option D
Explanation:
For 2 years at 10%, effective compound interest rate is 10 + 10 + (1010)/100 = 21%. Effective simple interest rate is 10 * 2 = 20%. Given 21% of sum = 420, then 1% of sum = 20. Simple Interest = 20% of sum = 20 * 20 = Rs. 400.
For 2 years at 10%, effective compound interest rate is 10 + 10 + (1010)/100 = 21%. Effective simple interest rate is 10 * 2 = 20%. Given 21% of sum = 420, then 1% of sum = 20. Simple Interest = 20% of sum = 20 * 20 = Rs. 400.
This question belongs to:
Maths
Compound Interest
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