Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #21

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Find the compound interest on Rs. 10000 at 8% per annum for 1 year compounded quarterly.

A. Rs. 816

B. Rs. 832

C. Rs. 800

D. Rs. 824.32

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Correct Answer: Option D

Explanation:
Quarterly rate = 2%, n = 4. A = 10000 × (1.02)⁴ = 10000 × 1.08243216 = 10824.3216, CI ≈ Rs. 824.32.

This question belongs to: Maths Compound Interest

Question #22

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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. 440

C. Rs. 420

D. Rs. 410

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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 #23

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A sum of money becomes 4 times in 2 years at compound interest. The rate of interest per annum is:

A. 200%

B. 75%

C. 100%

D. 50%

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Correct Answer: Option C

Explanation:
P(1 + r)² = 4P ⇒ (1+r)² = 4 ⇒ 1+r = 2 ⇒ r = 1 = 100%.

This question belongs to: Maths Compound Interest

Question #24

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The compound interest on Rs. 6000 for 2 years at 5% per annum is:

A. Rs. 600

B. Rs. 630

C. Rs. 610

D. Rs. 615

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Correct Answer: Option D

Explanation:
A = 6000 × (1.05)² = 6000 × 1.1025 = 6615, CI = 6615 − 6000 = Rs. 615.

This question belongs to: Maths Compound Interest

Question #25

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What will be the compound interest on Rs. 7500 at 4% per annum for 2 years?

A. Rs. 624

B. Rs. 608

C. Rs. 612

D. Rs. 616

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Correct Answer: Option C

Explanation:
A = 7500 × (1.04)² = 7500 × 1.0816 = 8112, CI = 8112 − 7500 = Rs. 612.

This question belongs to: Maths Compound Interest

Question #26

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The difference between CI and SI on Rs. 8000 for 2 years at 5% per annum is:

A. Rs. 18

B. Rs. 20

C. Rs. 22

D. Rs. 16

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Correct Answer: Option B

Explanation:
Difference = P × (R/100)² = 8000 × 0.0025 = Rs. 20.

This question belongs to: Maths Compound Interest

Question #27

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At compound interest, a sum becomes 1.21 times in 2 years. The rate of interest per annum is:

A. 9%

B. 12%

C. 11%

D. 10%

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Correct Answer: Option D

Explanation:
(1 + r)² = 1.21 ⇒ 1 + r = 1.1 ⇒ r = 10%.

This question belongs to: Maths Compound Interest

Question #28

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Find the principal that yields a compound interest of Rs. 410 in 2 years at 5% per annum.

A. Rs. 4000

B. Rs. 4200

C. Rs. 4400

D. Rs. 3800

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Correct Answer: Option A

Explanation:
CI = P[(1.05)² − 1] = P × 0.1025 = 410 ⇒ P = 410 / 0.1025 = 4000.

This question belongs to: Maths Compound Interest

Question #29

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A certain sum amounts to Rs. 2205 in 2 years at 5% compound interest. The sum is:

A. Rs. 2150

B. Rs. 2000

C. Rs. 2100

D. Rs. 1900

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Correct Answer: Option B

Explanation:
P = 2205 / (1.05)² = 2205 / 1.1025 = 2000.

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Question #30

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The compound interest on Rs. 4000 at 10% per annum for 2 years compounded half-yearly is:

A. Rs. 861

B. Rs. 820

C. Rs. 800

D. Rs. 840

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Correct Answer: Option A

Explanation:
Half-yearly rate = 5%, n = 4. A = 4000 × (1.05)⁴ = 4000 × 1.21550625 = 4862.025, CI = 862.025 ≈ Rs. 861.

This question belongs to: Maths Compound Interest

Question #31

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If the compound interest on a sum for 2 years at 10% is Rs. 840, the simple interest on the same sum for 2 years at the same rate is:

A. Rs. 780

B. Rs. 800

C. Rs. 760

D. Rs. 820

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Correct Answer: Option B

Explanation:
CI = P[(1.1)² − 1] = 0.21P = 840 ⇒ P = 4000. SI = 4000 × 10 × 2 / 100 = 800.

This question belongs to: Maths Compound Interest

Question #32

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In what time will Rs. 1000 amount to Rs. 1331 at 10% per annum compound interest?

A. 2 years

B. 3.5 years

C. 2.5 years

D. 3 years

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Correct Answer: Option D

Explanation:
1000 × (1.1)^t = 1331 ⇒ (1.1)^t = 1.331 = (1.1)³ ⇒ t = 3 years.

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Question #33

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The effective rate of interest for 10% per annum compounded half-yearly is:

A. 10.25%

B. 10.50%

C. 10.10%

D. 10.75%

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Correct Answer: Option A

Explanation:
Effective rate = (1.05)² − 1 = 1.1025 − 1 = 0.1025 = 10.25%.

This question belongs to: Maths Compound Interest

Question #34

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A sum of money at compound interest amounts to Rs. 14520 in 2 years and to Rs. 15972 in 3 years. Find the sum.

A. Rs. 14000

B. Rs. 12000

C. Rs. 13000

D. Rs. 10000

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Correct Answer: Option B

Explanation:
Rate = (15972/14520 − 1) × 100 = 10%. P = 14520 / (1.1)² = 14520 / 1.21 = 12000.

This question belongs to: Maths Compound Interest

Question #35

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The compound interest on Rs. 3000 for 3 years at 5% per annum is:

A. Rs. 475.00

B. Rs. 472.875

C. Rs. 472.50

D. Rs. 473.00

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Correct Answer: Option B

Explanation:
A = 3000 × (1.05)³ = 3000 × 1.157625 = 3472.875, CI = 3472.875 − 3000 = Rs. 472.875.

This question belongs to: Maths Compound Interest

Question #36

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Find the compound interest on Rs. 25000 at 12% per annum for 1 year compounded half-yearly.

A. Rs. 3090

B. Rs. 3180

C. Rs. 3120

D. Rs. 3150

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Correct Answer: Option A

Explanation:
Half-yearly rate = 6%, n = 2. A = 25000 × (1.06)² = 25000 × 1.1236 = 28090, CI = 28090 − 25000 = Rs. 3090.

This question belongs to: Maths Compound Interest

Question #37

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If the simple interest on a sum for 2 years at 8% is Rs. 400, the compound interest on the same sum for 2 years at 8% is:

A. Rs. 440

B. Rs. 424

C. Rs. 432

D. Rs. 416

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Correct Answer: Option D

Explanation:
P = SI × 100 / (8×2) = 40000/16 = 2500. CI = 2500[(1.08)² − 1] = 2500 × 0.1664 = Rs. 416.

This question belongs to: Maths Compound Interest

Question #38

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A sum of money becomes 2 times in 4 years at compound interest. In how many years will it become 8 times?

A. 16 years

B. 10 years

C. 12 years

D. 8 years

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Correct Answer: Option C

Explanation:
2 times in 4 years; 8 = 2³, so 4 × 3 = 12 years.

This question belongs to: Maths Compound Interest

Question #39

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The difference between compound interest and simple interest on Rs. 2000 for 3 years at 5% per annum is:

A. Rs. 15.25

B. Rs. 16.00

C. Rs. 16.50

D. Rs. 15.50

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Correct Answer: Option A

Explanation:
CI − SI = P × (R/100)² × (3 + R/100) = 2000 × 0.0025 × 3.05 = 2000 × 0.007625 = Rs. 15.25.

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Question #40

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At what rate percent per annum compound interest will Rs. 400 amount to Rs. 484 in 2 years?

A. 15%

B. 10%

C. 12%

D. 8%

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Correct Answer: Option B

Explanation:
400(1 + r)² = 484 ⇒ (1+r)² = 1.21 ⇒ 1+r = 1.1 ⇒ r = 10%.

This question belongs to: Maths Compound Interest

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