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Compound Interest Questions and Answers

Q1 :

Find the amount of Rs. 800 at compound interest in 2122frac{1}{2} years at 5 p.c.

A
  

Rs. 904.5

B
  

Rs. 805.5

C
  

Rs. 104.5

D
  

Rs. 804.5

View Answer
Correct Answer: A

Rs. 904.5

Description:

Amount= Rs. 800×(1+5100)2×(1+5200)text{Amount} = text{ Rs. } 800 times bigg(1 + frac{5}{100} bigg)^2 times bigg(1 + frac{5}{200}bigg)
= Rs. 904.05

Q2 :

Find the sum if it matured to Rs. 2809 becomes in two years at the rate of 6% compounded yearly, what is the sum?

A
  

Rs. 2500

B
  

Rs. 2250

C
  

Rs. 1575

D
  

Rs. 2000

View Answer
Correct Answer: A

Rs. 2500

Description:

Sum=A(1+r100)n=2809(1+6100)2text{Sum} = frac{A}{ big(1 +frac{r}{100} big)^n } = frac{2809}{ big(1 + frac{6}{100} big)^2}

Sum=A(1+r100)n=2809(1+6100)2text{Sum} = frac{A} { bigg(1 +frac{r}{100} bigg)^n } = frac{2809}{bigg(1 + frac{6}{100} bigg)^2}





=2809×250053×53=Rs.2500=frac{2809 times 2500}{53 times 53} = text{Rs.} 2500

Q3 :

A sum of money put out at compound interest amounts in two years to Rs. 2809 and in three years to Rs. 2977.54. Find the rate percent.

A
  

4%

B
  

3%

C
  

6%

D
  

8%

View Answer
Correct Answer: C

6%

Description:

Interest in one year

= Rs. 2977.54 - Rs. 2809 =  Rs. 168.54

Principal = Rs. 2809, Int. = Rs. 168.54

Time = 1 year

Rate =16854×100100×2809=6%therefore text {Rate } = frac{16854 times 100}{100 times 2809} = 6%

Q4 :

The compound interest on a certain sum for 2 years is Rs. 40.80 and the simple interest is Rs. 40. Find the rate p.c.?

A
  

10%

B
  

8%

C
  

6%

D
  

4%

View Answer
Correct Answer: D

4%

Description:

Interest for 1 year on Rs. 20 is 80 P.

Rate%=0.80×10020=4%text{Rate} % = frac{0.80 times 100} {20} = 4%

Q5 :

At what rate percent compound interest will Rs. 80,000 amout to Rs. 88,220 in 2 years?

A
  

5%

B
  

8%

C
  

10%

D
  

12%

View Answer
Correct Answer: A

5%

Description:

88200=80000(1+x100)2text{88200} = 80000 Big(1 + frac{x}{100}Big)^2

(1+x100)2=441400=(2120)2therefore Big(1 + frac{x}{100} Big)^2 = frac{441}{400} = Big( frac{21}{20}Big)^2

x=5%x = 5%

Q6 :

Find the least number of complete years in which a sum of money put at 20 p.c. compound  interest will be more than doubled?

A
  

4 years

B
  

8 years

C
  

2 years

D
  

6 years

View Answer
Correct Answer: A

4 years

Description:

x×(1+20100)n>2xx times Big(1 + frac{20}{100}Big)^n > 2x

or(65)n>2, it is true if n=4text {or} Big(frac{6}{5}Big)^n > 2, text{ it is true if } n = 4

Q7 :

What principal will amount to Rs. 1352 in 2 years at 4 p.c. compound interest?

A
  

1250

B
  

1300

C
  

1350

D
  

1500

View Answer
Correct Answer: A

1250

Description:

Principal =1352(1+4100)2text{Principal } = frac{1352}{left( 1 + frac{4}{100}right)^2 }

=1352×625676=Rs. 1250= 1352 times frac{625}{676} = text{Rs. } 1250

Q8 :

At what rate percent compound interest does a sum of money become four fold in 2 years?

A
  

100%

B
  

10%

C
  

25%

D
  

50%

View Answer
Correct Answer: A

100%

Description:

4x=x(1+r100)24x = xBig(1 + frac {r}{100} Big)^2

(1+r100)2=40 or 1+r100=2therefore Big(1 + frac{r}{100} Big)^2 = 40 text{ or } 1 + frac{r}{100} = 2

or r=100%text{or } r =100%

Q9 :

Find the compound interest of Rs. 800 for 3 years at 5 p.c.

A
  

Rs. 126.10

B
  

Rs. 826.10

C
  

Rs. 820.10

D
  

Rs. 850.00

View Answer
Correct Answer: A

Rs. 126.10

Description:

Amount=800×(1+5100)3text{Amount} = 800 times Big(1 + frac{5}{100}Big)^3

=800×92618000=926.10= 800 times frac{9261}{8000} = 926.10

 Interest=Rs.926.10Rs.800=Rs.126.10therefore text{ Interest} = text{Rs.} 926.10 - text{Rs.} 800 = text{Rs.} 126.10

Q10 :

A merchant commences with a certain capital and gains annually at the rate of 25%. At the end of 3 years he is worth Rs. 10000. What was his original capital?

A
  

Rs. 3120

B
  

Rs. 4120

C
  

Rs. 5000

D
  

Rs. 5120

View Answer
Correct Answer: D

Rs. 5120

Description:

 Capital =10000(1+25100)3=Rs. 5120text{ Capital } = frac{10000}{Big( 1 + frac{25}{100} Big)^3 } = text{Rs. } 5120

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