Compound Interest MCQs
Practice Compound Interest MCQs with answers and detailed explanations. Learn compound interest formulas, annual, half-yearly and quarterly compounding, population growth, depreciation, investment and advanced aptitude questions for competitive examinations.
Question #1
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What is the compound interest on Rs. 2000 for 2 years at 5% per annum compounded annually?
Correct Answer: Option A
Explanation:
Amount = 2000 × (1.05)² = 2000 × 1.1025 = 2205, CI = 2205 − 2000 = Rs. 205.
Amount = 2000 × (1.05)² = 2000 × 1.1025 = 2205, CI = 2205 − 2000 = Rs. 205.
This question belongs to:
Maths
Compound Interest
Question #2
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The compound interest on Rs. 5000 at 8% per annum for 1 year compounded half-yearly is:
Correct Answer: Option D
Explanation:
Rate per half-year = 4%, n = 2. A = 5000 × (1.04)² = 5000 × 1.0816 = 5408, CI = 5408 − 5000 = Rs. 408.
Rate per half-year = 4%, n = 2. A = 5000 × (1.04)² = 5000 × 1.0816 = 5408, CI = 5408 − 5000 = Rs. 408.
This question belongs to:
Maths
Compound Interest
Question #3
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Find the compound interest on Rs. 8000 for 1.5 years at 10% per annum compounded half-yearly.
Correct Answer: Option C
Explanation:
Half-yearly rate = 5%, periods = 3. A = 8000 × (1.05)³ = 8000 × 1.157625 = 9261, CI = 9261 − 8000 = Rs. 1261.
Half-yearly rate = 5%, periods = 3. A = 8000 × (1.05)³ = 8000 × 1.157625 = 9261, CI = 9261 − 8000 = Rs. 1261.
This question belongs to:
Maths
Compound Interest
Question #4
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At what rate percent per annum will a sum of Rs. 1000 amount to Rs. 1331 in 3 years at compound interest?
Correct Answer: Option D
Explanation:
1000 × (1 + R/100)³ = 1331 ⇒ (1 + R/100)³ = 1.331 = (1.1)³ ⇒ R/100 = 0.1 ⇒ R = 10%.
1000 × (1 + R/100)³ = 1331 ⇒ (1 + R/100)³ = 1.331 = (1.1)³ ⇒ R/100 = 0.1 ⇒ R = 10%.
This question belongs to:
Maths
Compound Interest
Question #5
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In how many years will a sum of Rs. 5000 become Rs. 6655 at 10% per annum compound interest?
Correct Answer: Option B
Explanation:
5000 × (1.1)^n = 6655 ⇒ (1.1)^n = 1.331 = (1.1)³ ⇒ n = 3 years.
5000 × (1.1)^n = 6655 ⇒ (1.1)^n = 1.331 = (1.1)³ ⇒ n = 3 years.
This question belongs to:
Maths
Compound Interest
Question #6
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The difference between compound interest and simple interest on Rs. 1500 for 2 years at 10% per annum is:
Correct Answer: Option C
Explanation:
Difference = P × (R/100)² = 1500 × (0.1)² = 1500 × 0.01 = Rs. 15.
Difference = P × (R/100)² = 1500 × (0.1)² = 1500 × 0.01 = Rs. 15.
This question belongs to:
Maths
Compound Interest
Question #7
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The simple interest on a certain sum for 2 years at 5% is Rs. 200. The compound interest on the same sum for the same period and rate is:
Correct Answer: Option D
Explanation:
SI = P × 5 × 2/100 = 0.1P = 200 ⇒ P = 2000. CI = P[(1.05)² − 1] = 2000 × 0.1025 = Rs. 205.
SI = P × 5 × 2/100 = 0.1P = 200 ⇒ P = 2000. CI = P[(1.05)² − 1] = 2000 × 0.1025 = Rs. 205.
This question belongs to:
Maths
Compound Interest
Question #8
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Find the principal if the compound interest on it for 2 years at 10% per annum is Rs. 525.
Correct Answer: Option D
Explanation:
CI = P[(1.1)² − 1] = P × 0.21 = 525 ⇒ P = 525/0.21 = Rs. 2500.
CI = P[(1.1)² − 1] = P × 0.21 = 525 ⇒ P = 525/0.21 = Rs. 2500.
This question belongs to:
Maths
Compound Interest
Question #9
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A sum of money at compound interest amounts to Rs. 2420 in 2 years and to Rs. 2662 in 3 years. Find the rate of interest.
Correct Answer: Option D
Explanation:
Amount in 3 years / Amount in 2 years = 2662/2420 = 1.1 = 1 + R/100 ⇒ R = 10%.
Amount in 3 years / Amount in 2 years = 2662/2420 = 1.1 = 1 + R/100 ⇒ R = 10%.
This question belongs to:
Maths
Compound Interest
Question #10
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What is the effective annual rate of interest corresponding to a nominal rate of 6% per annum compounded half-yearly?
Correct Answer: Option A
Explanation:
Effective rate = (1 + 0.03)² − 1 = 1.0609 − 1 = 0.0609 = 6.09%.
Effective rate = (1 + 0.03)² − 1 = 1.0609 − 1 = 0.0609 = 6.09%.
This question belongs to:
Maths
Compound Interest
