Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #401

A sum of money invested at compound interest amounts to Rs. 4624 in 2 years and to Rs. 4913 in 3 years. Find the rate of interest per annum.

A. 6.25%

B. 6.5%

C. 5%

D. 6%

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Correct Answer: Option A

Explanation:
Interest for the 3rd year = 4913 - 4624 = Rs. 289. Rate of interest = (289 / 4624) * 100 = 0.0625 * 100 = 6.25%.

This question belongs to: Maths Compound Interest

Question #402

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If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what will be the compound interest on the same sum at the same rate for the same time?

A. Rs. 53.50

B. Rs. 52.00

C. Rs. 50.50

D. Rs. 51.25

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Correct Answer: Option D

Explanation:
Simple Interest for 1 year = 50 / 2 = Rs. 25. Compound interest for 2 years includes the simple interest plus interest on the first year's interest. Extra interest = 5% of 25 = Rs. 1.25. Total compound interest = 50 + 1.25 = Rs. 51.25.

This question belongs to: Maths Compound Interest

Question #403

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Find the compound interest on Rs. 31250 for 3 years at 8% per annum, compounded annually.

A. Rs. 7824

B. Rs. 7500

C. Rs. 8076

D. Rs. 8000

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Correct Answer: Option A

Explanation:
Amount = 31250 * (1 + 8/100)^3 = 31250 * (27/25)^3 = 31250 * (19683 / 15625) = 2 * 19683 = Rs. 39366. Compound Interest = 39366 - 31250 = Rs. 8076. Correct option is D.

This question belongs to: Maths Compound Interest

Question #404

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A sum of money at compound interest amounts to thrice itself in 3 years. In how many years will it be 9 times itself?

A. 12 years

B. 9 years

C. 8 years

D. 6 years

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Correct Answer: Option D

Explanation:
The sum becomes 3 times in 3 years. It will become 3^2 = 9 times in 2 * 3 = 6 years.

This question belongs to: Maths Compound Interest

Question #405

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What sum of money will amount to Rs. 5290 in 2 years at 15% per annum compound interest compounded annually?

A. Rs. 4000

B. Rs. 4400

C. Rs. 3800

D. Rs. 4200

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Correct Answer: Option A

Explanation:
Amount = P * (1 + 15/100)^2 => 5290 = P * (1.15)^2 => 5290 = P * 1.3225 => P = 5290 / 1.3225 = Rs. 4000.

This question belongs to: Maths Compound Interest

Question #406

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The population of a city increases at the rate of 5% annually. If the present population is 185220, what was its population 3 years ago?

A. 150000

B. 160000

C. 170000

D. 180000

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Correct Answer: Option B

Explanation:
Population 3 years ago = 185220 / (1 + 5/100)^3 = 185220 / (21/20)^3 = 185220 * 8000 / 9261 = 20 * 8000 = 160000.

This question belongs to: Maths Compound Interest

Question #407

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The value of a machine depreciates at the rate of 10% per annum. If its present value is Rs. 162000, what was its value 2 years ago?

A. Rs. 210000

B. Rs. 190000

C. Rs. 200000

D. Rs. 220000

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Correct Answer: Option C

Explanation:
Value 2 years ago = 162000 / (1 - 10/100)^2 = 162000 / (0.9)^2 = 162000 / 0.81 = Rs. 200000.

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Question #408

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

A. Rs. 98

B. Rs. 100

C. Rs. 101.50

D. Rs. 101

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Correct Answer: Option B

Explanation:
Effective rate of compound interest for 2 years at 4% = 4 + 4 + (44)/100 = 8.16%. Simple interest rate = 4 * 2 = 8%. Given 8.16% of sum = 102, then 8% of sum = (102 / 8.16) * 8 = 12.5 * 8 = Rs. 100.

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Question #409

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What is the compound interest on Rs. 64000 for 1 year at 5% per annum, compounded half-yearly?

A. Rs. 3240

B. Rs. 3200

C. Rs. 3320

D. Rs. 3280

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Correct Answer: Option A

Explanation:
Half-yearly rate = 5/2 = 2.5%. Time = 2 half-years. Amount = 64000 * (1 + 2.5/100)^2 = 64000 * (41/40)^2 = 64000 * (1681 / 1600) = 40 * 1681 = Rs. 67240. Compound Interest = 67240 - 64000 = Rs. 3240.

This question belongs to: Maths Compound Interest

Question #410

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Find the difference between compound interest and simple interest on Rs. 5000 for 2 years at 8% per annum.

A. Rs. 42

B. Rs. 40

C. Rs. 36

D. Rs. 32

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Correct Answer: Option D

Explanation:
Difference for 2 years = P * (R/100)^2 = 5000 * (8/100)^2 = 5000 * (64 / 10000) = Rs. 32.

This question belongs to: Maths Compound Interest

Question #411

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A sum of money invested at compound interest doubles itself in 4 years. In how many years will it become 16 times itself?

A. 20 years

B. 16 years

C. 24 years

D. 12 years

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Correct Answer: Option B

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

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Question #412

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The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 246. What is the sum?

A. Rs. 2600

B. Rs. 2400

C. Rs. 2500

D. Rs. 2200

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Correct Answer: Option B

Explanation:
Effective compound interest rate for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 246 => P = 246 / 0.1025 = Rs. 2400.

This question belongs to: Maths Compound Interest

Question #413

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At what rate percent per annum will Rs. 1000 amount to Rs. 1331 in 3 years, compound interest compounded annually?

A. 15%

B. 10%

C. 8%

D. 12%

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Correct Answer: Option B

Explanation:
Amount/Principal = 1331 / 1000 = (11 / 10)^3. Therefore, 1 + R/100 = 11/10 => R/100 = 1/10 => R = 10%.

This question belongs to: Maths Compound Interest

Question #414

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A sum of Rs. 12000 deposited at compound interest becomes double after 5 years. After 20 years, it will become:

A. Rs. 96000

B. Rs. 192000

C. Rs. 120000

D. Rs. 182000

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Correct Answer: Option B

Explanation:
In 20 years, there are 20 / 5 = 4 intervals of 5 years. Expansion factor = 2^4 = 16. Total amount = 12000 * 16 = Rs. 192000.

This question belongs to: Maths Compound Interest

Question #415

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What is the compound interest on Rs. 16000 for 1.5 years at 10% per annum, compounded half-yearly?

A. Rs. 2600

B. Rs. 2522

C. Rs. 2520

D. Rs. 2400

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Correct Answer: Option B

Explanation:
Half-yearly rate = 10/2 = 5%. Time = 1.5 years = 3 half-years. Amount = 16000 * (1 + 5/100)^3 = 16000 * (1.05)^3 = 16000 * 1.157625 = Rs. 18522. Compound Interest = 18522 - 16000 = Rs. 2522.

This question belongs to: Maths Compound Interest

Question #416

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A sum of money amounts to Rs. 4840 in 2 years and to Rs. 5324 in 3 years at compound interest compounded annually. Find the principal sum.

A. Rs. 4200

B. Rs. 4000

C. Rs. 3600

D. Rs. 4400

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Correct Answer: Option B

Explanation:
Rate of interest = ((5324 - 4840) / 4840) * 100 = (484 / 4840) * 100 = 10%. Principal P = 4840 / (1 + 10/100)^2 = 4840 / 1.21 = Rs. 4000.

This question belongs to: Maths Compound Interest

Question #417

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The difference between simple and compound interest on a sum of money for 2 years at 10% per annum is Rs. 65. Find the sum.

A. Rs. 7500

B. Rs. 7000

C. Rs. 6500

D. Rs. 6000

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Correct Answer: Option C

Explanation:
Difference for 2 years = P * (R/100)^2 => 65 = P * (10/100)^2 => 65 = P * 0.01 => P = 65 / 0.01 = Rs. 6500.

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Question #418

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If the compound interest on a certain sum for 2 years at 12% per annum is Rs. 1590, find the simple interest on the same sum at the same rate for the same period.

A. Rs. 1400

B. Rs. 1550

C. Rs. 1450

D. Rs. 1500

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Correct Answer: Option D

Explanation:
Effective compound interest rate = 12 + 12 + (1212)/100 = 25.44%. Simple interest rate = 12 * 2 = 24%. Given 25.44% of sum = 1590 => Sum = 1590 / 0.2544 = Rs. 6250. Simple Interest = 24% of 6250 = Rs. 1500.

This question belongs to: Maths Compound Interest

Question #419

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Find the compound interest on Rs. 8000 for 1 year at 10% per annum, compounded quarterly.

A. Rs. 831.25

B. Rs. 810.20

C. Rs. 830.50

D. Rs. 824.30

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Correct Answer: Option A

Explanation:
Quarterly rate = 10/4 = 2.5%. Time = 1 year = 4 quarters. Amount = 8000 * (1 + 2.5/100)^4 = 8000 * (41/40)^4 = 8000 * (2825761 / 2560000) = 2825761 / 320 = Rs. 8830.50. (Let's check 8000 * (1.025)^4 = 8000 * 1.10381289 = Rs. 8830.50. CI = Rs. 830.50. Correct option is C).

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Question #420

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A sum of money placed at compound interest becomes three times of itself in 4 years. In how many years will it become 27 times of itself?

A. 20 years

B. 12 years

C. 16 years

D. 8 years

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Correct Answer: Option B

Explanation:
The sum becomes 3^1 times in 4 years. It will become 27 (3^3) times in 3 * 4 = 12 years.

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