The simple interest on a sum for 2 years at 5% is Rs. 500. The compound interest on the same sum for 2 years at 5% is: MCQ with Answer and Explanation

The simple interest on a sum for 2 years at 5% is Rs. 500. The compound interest on the same sum for 2 years at 5% is:

A. Rs. 500

B. Rs. 512.50

C. Rs. 525

D. Rs. 510

Answer: Option B

P = 50000/(5×2) = 5000. CI = 5000[(1.05)² − 1] = 5000 × 0.1025 = Rs. 512.50.

This question belongs to: Maths Compound Interest

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Question #1 Report Error

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

A. 8.16%

B. 8.24%

C. 8.42%

D. 8.30%

Correct Answer: Option B

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

This question belongs to: Maths Compound Interest

Question #2 Report Error

A sum of money placed at compound interest becomes double of itself in 5 years. In how many years will it become 16 times of itself?

A. 20 years

B. 25 years

C. 30 years

D. 15 years

Correct Answer: Option A

Explanation:
The sum becomes 2^1 times in 5 years. It will become 16 (2^4) times in 4 * 5 = 20 years.

This question belongs to: Maths Compound Interest

Question #3 Report Error

What sum will amount to Rs. 2315.25 in 3 years at 5% compound interest?

A. Rs. 2000

B. Rs. 1800

C. Rs. 1900

D. Rs. 2100

Correct Answer: Option A

Explanation:
P = 2315.25 / (1.05)³ = 2315.25 / 1.157625 = 2000.

This question belongs to: Maths Compound Interest