A sum of money yields a compound interest of Rs. 205 in 2 years at 5% per annum. Find the principal sum. MCQ with Answer and Explanation
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Question #1
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If the simple interest on a sum for 2 years at 8% is Rs. 400, the compound interest on the same sum for 2 years at 8% is:
Correct Answer: Option D
Explanation:
P = SI × 100 / (8×2) = 40000/16 = 2500. CI = 2500[(1.08)² − 1] = 2500 × 0.1664 = Rs. 416.
P = SI × 100 / (8×2) = 40000/16 = 2500. CI = 2500[(1.08)² − 1] = 2500 × 0.1664 = Rs. 416.
This question belongs to:
Maths
Compound Interest
Question #2
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What is the compound interest on Rs. 40000 for 1 year at 10% per annum, compounded quarterly?
Correct Answer: Option C
Explanation:
Quarterly rate = 10/4 = 2.5%. Time = 4 quarters. Amount = 40000 * (1 + 2.5/100)^4 = 40000 * (1.025)^4 = 40000 * 1.10381289 = Rs. 44152.51. Compound Interest = 44152.51 - 40000 = Rs. 4152.51.
Quarterly rate = 10/4 = 2.5%. Time = 4 quarters. Amount = 40000 * (1 + 2.5/100)^4 = 40000 * (1.025)^4 = 40000 * 1.10381289 = Rs. 44152.51. Compound Interest = 44152.51 - 40000 = Rs. 4152.51.
This question belongs to:
Maths
Compound Interest
Question #3
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The effective annual rate for 20% per annum compounded half-yearly is:
Correct Answer: Option C
Explanation:
Half-yearly rate 10%, (1.1)² = 1.21, effective = 21%.
Half-yearly rate 10%, (1.1)² = 1.21, effective = 21%.
This question belongs to:
Maths
Compound Interest
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