The difference between compound interest and simple interest on a sum for 2 years at 5% per annum is Rs. 25. The sum is: MCQ with Answer and Explanation

The difference between compound interest and simple interest on a sum for 2 years at 5% per annum is Rs. 25. The sum is:

A. Rs. 12000

B. Rs. 8000

C. Rs. 10000

D. Rs. 15000

Answer: Option C

Difference = P × (r/100)² ⇒ 25 = P × 0.0025 ⇒ P = 10000.

This question belongs to: Maths Compound Interest

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Question #1 Report Error

The effective rate of interest for 4% per annum compounded half-yearly is:

A. 4.08%

B. 4.20%

C. 4.16%

D. 4.04%

Correct Answer: Option D

Explanation:
Effective = (1.02)² − 1 = 1.0404 − 1 = 4.04%.

This question belongs to: Maths Compound Interest

Question #2 Report Error

A sum of money at compound interest doubles in 5 years. In how many years will it become 4 times?

A. 15 years

B. 8 years

C. 12 years

D. 10 years

Correct Answer: Option D

Explanation:
2²=4, so 5×2=10 years.

This question belongs to: Maths Compound Interest

Question #3 Report Error

What is the effective annual rate of interest corresponding to a nominal rate of 6% per annum compounded half-yearly?

A. 6.12%

B. 6.15%

C. 6.06%

D. 6.09%

Correct Answer: Option D

Explanation:
Effective rate = (1 + 0.03)² − 1 = 1.0609 − 1 = 0.0609 = 6.09%.

This question belongs to: Maths Compound Interest