The effective annual rate of interest for 12% per annum compounded quarterly is: MCQ with Answer and Explanation
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Question #1
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If the simple interest on a sum of money for 3 years at 5% per annum is Rs. 1200, find the compound interest on the same sum at the same rate for the same period.
Correct Answer: Option B
Explanation:
Simple Interest for 1 year = 1200 / 3 = Rs. 400. Principal P = (1200 * 100) / (5 * 3) = Rs. 8000. Amount with compound interest = 8000 * (1 + 5/100)^3 = 8000 * 1.157625 = Rs. 9261. Compound Interest = 9261 - 8000 = Rs. 1261.
Simple Interest for 1 year = 1200 / 3 = Rs. 400. Principal P = (1200 * 100) / (5 * 3) = Rs. 8000. Amount with compound interest = 8000 * (1 + 5/100)^3 = 8000 * 1.157625 = Rs. 9261. Compound Interest = 9261 - 8000 = Rs. 1261.
This question belongs to:
Maths
Compound Interest
Question #2
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At what rate percent per annum will Rs. 20000 amount to Rs. 24200 in 2 years, compound interest compounded annually?
Correct Answer: Option D
Explanation:
Amount/Principal = 24200 / 20000 = 121 / 100 = (11 / 10)^2. Therefore, 1 + R/100 = 11/10 => R/100 = 1/10 => R = 10%.
Amount/Principal = 24200 / 20000 = 121 / 100 = (11 / 10)^2. Therefore, 1 + R/100 = 11/10 => R/100 = 1/10 => R = 10%.
This question belongs to:
Maths
Compound Interest
Question #3
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A sum of money at compound interest becomes Rs. 7396 in 2 years and Rs. 7950.70 in 3 years. Find the sum.
Correct Answer: Option A
Explanation:
Rate = (7950.70/7396 - 1)*100 = 7.5%? 7950.70/7396 = 1.075, so 7.5%. P = 7396 / (1.075)² = 7396 / 1.155625 = 6400 exactly. Check: 1.075^2 = 1.155625, 6400*1.155625 = 7396. So answer 6400.
Rate = (7950.70/7396 - 1)*100 = 7.5%? 7950.70/7396 = 1.075, so 7.5%. P = 7396 / (1.075)² = 7396 / 1.155625 = 6400 exactly. Check: 1.075^2 = 1.155625, 6400*1.155625 = 7396. So answer 6400.
This question belongs to:
Maths
Compound Interest
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