The effective annual rate of interest for 8% per annum compounded quarterly is: MCQ with Answer and Explanation

The effective annual rate of interest for 8% per annum compounded quarterly is:

A. 8.24%

B. 8.16%

C. 8.42%

D. 8.30%

Answer: Option A

Quarterly rate 2%, (1.02)⁴ = 1.08243216, effective = 8.2432% ≈ 8.24%.

This question belongs to: Maths Compound Interest

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Question #1 Report Error

A sum of money at compound interest becomes 9 times in 4 years. In how many years will it become 81 times?

A. 6 years

B. 10 years

C. 7 years

D. 8 years

Correct Answer: Option D

Explanation:
81 = 9², so 4 × 2 = 8 years.

This question belongs to: Maths Compound Interest

Question #2 Report Error

If the simple interest on a sum for 3 years at 10% is Rs. 600, the compound interest on the same sum for 2 years at the same rate is:

A. Rs. 400

B. Rs. 410

C. Rs. 420

D. Rs. 440

Correct Answer: Option C

Explanation:
SI = P × 10 × 3 / 100 = 0.3P = 600 ⇒ P = 2000. CI for 2 years = 2000[(1.1)² − 1] = 2000 × 0.21 = Rs. 420.

This question belongs to: Maths Compound Interest

Question #3 Report Error

Find the compound interest on Rs. 2500 at 12% per annum for 2 years.

A. Rs. 640

B. Rs. 630

C. Rs. 636

D. Rs. 650

Correct Answer: Option C

Explanation:
A = 2500 × (1.12)² = 2500 × 1.2544 = 3136, CI = 3136 − 2500 = Rs. 636.

This question belongs to: Maths Compound Interest