The compound interest on a certain sum for 2 years at 5% per annum is Rs. 1230. Find the principal sum. MCQ with Answer and Explanation

The compound interest on a certain sum for 2 years at 5% per annum is Rs. 1230. Find the principal sum.

A. Rs. 13000

B. Rs. 12000

C. Rs. 12500

D. Rs. 11500

Answer: Option B

Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 1230 => P = 1230 / 0.1025 = Rs. 12000.

This question belongs to: Maths Compound Interest

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Question #1 Report Error

The effective rate of interest for 8% per annum compounded half-yearly is:

A. 8.24%

B. 8.30%

C. 8.16%

D. 8.08%

Correct Answer: Option C

Explanation:
Effective = (1.04)² − 1 = 1.0816 − 1 = 8.16%.

This question belongs to: Maths Compound Interest

Question #2 Report Error

Find the compound interest on Rs. 5600 at 5% per annum for 2 years.

A. Rs. 588

B. Rs. 600

C. Rs. 574

D. Rs. 560

Correct Answer: Option C

Explanation:
A = 5600 × 1.1025 = 6174, CI = 6174 − 5600 = Rs. 574.

This question belongs to: Maths Compound Interest

Question #3 Report Error

At what rate of compound interest will Rs. 625 amount to Rs. 676 in 2 years?

A. 6%

B. 5%

C. 3%

D. 4%

Correct Answer: Option D

Explanation:
625(1 + r)² = 676 ⇒ (1+r)² = 1.0816 = (1.04)² ⇒ r = 4%.

This question belongs to: Maths Compound Interest