Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #1

Share Report

What is the compound interest on Rs. 2000 for 2 years at 5% per annum compounded annually?

A. Rs. 220

B. Rs. 200

C. Rs. 205

D. Rs. 210

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option C

Explanation:
Amount = 2000 × (1.05)² = 2000 × 1.1025 = 2205, CI = 2205 − 2000 = Rs. 205.

This question belongs to: Maths Compound Interest

Question #2

Share Report

The compound interest on Rs. 5000 at 8% per annum for 1 year compounded half-yearly is:

A. Rs. 412

B. Rs. 408

C. Rs. 400

D. Rs. 416

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option B

Explanation:
Rate per half-year = 4%, n = 2. A = 5000 × (1.04)² = 5000 × 1.0816 = 5408, CI = 5408 − 5000 = Rs. 408.

This question belongs to: Maths Compound Interest

Question #3

Share Report

Find the compound interest on Rs. 8000 for 1.5 years at 10% per annum compounded half-yearly.

A. Rs. 1240

B. Rs. 1261

C. Rs. 1200

D. Rs. 1300

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option B

Explanation:
Half-yearly rate = 5%, periods = 3. A = 8000 × (1.05)³ = 8000 × 1.157625 = 9261, CI = 9261 − 8000 = Rs. 1261.

This question belongs to: Maths Compound Interest

Question #4

Share Report

At what rate percent per annum will a sum of Rs. 1000 amount to Rs. 1331 in 3 years at compound interest?

A. 9%

B. 12%

C. 11%

D. 10%

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
1000 × (1 + R/100)³ = 1331 ⇒ (1 + R/100)³ = 1.331 = (1.1)³ ⇒ R/100 = 0.1 ⇒ R = 10%.

This question belongs to: Maths Compound Interest

Question #5

Share Report

In how many years will a sum of Rs. 5000 become Rs. 6655 at 10% per annum compound interest?

A. 4 years

B. 5 years

C. 3 years

D. 2 years

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option C

Explanation:
5000 × (1.1)^n = 6655 ⇒ (1.1)^n = 1.331 = (1.1)³ ⇒ n = 3 years.

This question belongs to: Maths Compound Interest

Question #6

Share Report

The difference between compound interest and simple interest on Rs. 1500 for 2 years at 10% per annum is:

A. Rs. 25

B. Rs. 10

C. Rs. 20

D. Rs. 15

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
Difference = P × (R/100)² = 1500 × (0.1)² = 1500 × 0.01 = Rs. 15.

This question belongs to: Maths Compound Interest

Question #7

Share Report

The simple interest on a certain sum for 2 years at 5% is Rs. 200. The compound interest on the same sum for the same period and rate is:

A. Rs. 205

B. Rs. 215

C. Rs. 200

D. Rs. 210

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option A

Explanation:
SI = P × 5 × 2/100 = 0.1P = 200 ⇒ P = 2000. CI = P[(1.05)² − 1] = 2000 × 0.1025 = Rs. 205.

This question belongs to: Maths Compound Interest

Question #8

Share Report

Find the principal if the compound interest on it for 2 years at 10% per annum is Rs. 525.

A. Rs. 2700

B. Rs. 2600

C. Rs. 2400

D. Rs. 2500

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
CI = P[(1.1)² − 1] = P × 0.21 = 525 ⇒ P = 525/0.21 = Rs. 2500.

This question belongs to: Maths Compound Interest

Question #9

Share Report

A sum of money at compound interest amounts to Rs. 2420 in 2 years and to Rs. 2662 in 3 years. Find the rate of interest.

A. 10%

B. 8%

C. 15%

D. 12%

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option A

Explanation:
Amount in 3 years / Amount in 2 years = 2662/2420 = 1.1 = 1 + R/100 ⇒ R = 10%.

This question belongs to: Maths Compound Interest

Question #10

Share Report

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

A. 6.15%

B. 6.06%

C. 6.09%

D. 6.12%

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option C

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

This question belongs to: Maths Compound Interest

Question #11

Share Report

If the compound interest on a sum for 2 years at 4% per annum is Rs. 102, the simple interest for the same period and rate is:

A. Rs. 100

B. Rs. 102

C. Rs. 96

D. Rs. 98

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option A

Explanation:
CI = P[(1.04)² − 1] = P × 0.0816 = 102 ⇒ P = 1250. SI = 1250 × 4 × 2/100 = 100.

This question belongs to: Maths Compound Interest

Question #12

Share Report

The compound interest on Rs. 12000 for 1 year at 10% per annum compounded half-yearly is:

A. Rs. 1290

B. Rs. 1200

C. Rs. 1260

D. Rs. 1230

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
Half-yearly rate = 5%, periods = 2. A = 12000 × (1.05)² = 12000 × 1.1025 = 13230, CI = 13230 − 12000 = Rs. 1230.

This question belongs to: Maths Compound Interest

Question #13

Share Report

Find the compound interest on Rs. 1600 at 10% per annum for 2 years if the interest is compounded annually.

A. Rs. 320

B. Rs. 336

C. Rs. 350

D. Rs. 340

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option B

Explanation:
A = 1600 × (1.1)² = 1600 × 1.21 = 1936, CI = 1936 − 1600 = Rs. 336.

This question belongs to: Maths Compound Interest

Question #14

Share Report

The population of a town increases at 10% per annum. If the present population is 20000, what will it be after 2 years?

A. 24600

B. 24000

C. 24400

D. 24200

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
Population = 20000 × (1.1)² = 20000 × 1.21 = 24200.

This question belongs to: Maths Compound Interest

Question #15

Share Report

The value of a machine depreciates at 20% per annum. Its present value is Rs. 32000. What was its value 2 years ago?

A. Rs. 40000

B. Rs. 51200

C. Rs. 50000

D. Rs. 48000

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option C

Explanation:
Value 2 years ago = Present value / (1 − 0.2)² = 32000 / 0.64 = 50000.

This question belongs to: Maths Compound Interest

Question #16

Share Report

What sum will amount to Rs. 5832 in 2 years at 8% per annum compound interest?

A. Rs. 5200

B. Rs. 4800

C. Rs. 5400

D. Rs. 5000

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
P = 5832 / (1.08)² = 5832 / 1.1664 = 5000.

This question belongs to: Maths Compound Interest

Question #17

Share Report

At what rate of compound interest per annum will a sum of Rs. 800 become Rs. 882 in 2 years?

A. 4%

B. 5%

C. 8%

D. 6%

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option B

Explanation:
800 × (1 + r)² = 882 ⇒ (1+r)² = 1.1025 ⇒ 1+r = 1.05 ⇒ r = 5%.

This question belongs to: Maths Compound Interest

Question #18

Share Report

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. 15000

B. Rs. 12000

C. Rs. 8000

D. Rs. 10000

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

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

This question belongs to: Maths Compound Interest

Question #19

Share Report

A sum of money at compound interest doubles itself in 5 years. In how many years will it become 8 times?

A. 20 years

B. 25 years

C. 10 years

D. 15 years

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option D

Explanation:
Doubles in 5 years; 8 = 2³, so time = 5 × 3 = 15 years.

This question belongs to: Maths Compound Interest

Question #20

Share Report

The compound interest on a sum for 1 year at 8% compounded half-yearly is Rs. 408. The sum is:

A. Rs. 5200

B. Rs. 5000

C. Rs. 5400

D. Rs. 4800

View Answer & Solution Discuss

Get Complete Subject PDF for Maths

Correct Answer: Option B

Explanation:
A = P(1.04)² = P × 1.0816. CI = P × 0.0816 = 408 ⇒ P = 408 / 0.0816 = 5000.

This question belongs to: Maths Compound Interest

Compound Interest MCQs

Practice Questions

More Maths Topics