Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #441

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What is the compound interest on Rs. 40000 for 1 year at 10% per annum, compounded quarterly?

A. Rs. 4310.13

B. Rs. 4200.00

C. Rs. 4000.00

D. Rs. 4152.51

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Correct Answer: Option D

Explanation:
Quarterly rate = 10/4 = 2.5%. Time = 4 quarters. Amount = 40000 * (1 + 2.5/100)^4 = 40000 * (1.025)^4 = 40000 * 1.10381289 = Rs. 44152.51. Compound Interest = 44152.51 - 40000 = Rs. 4152.51.

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Question #442

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

A. 20 years

B. 24 years

C. 12 years

D. 16 years

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Correct Answer: Option D

Explanation:
The sum doubles (2^1) in 8 years. It will become 4 (2^2) times in 2 * 8 = 16 years.

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Question #443

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The difference between the simple interest and compound interest on a certain sum of money for 2 years at 12% per annum is Rs. 72. Find the sum.

A. Rs. 5500

B. Rs. 5000

C. Rs. 4500

D. Rs. 6000

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Correct Answer: Option B

Explanation:
Difference for 2 years = P * (R/100)^2 => 72 = P * (12/100)^2 => 72 = P * (144 / 10000) => P = (72 * 10000) / 144 = 5000.

This question belongs to: Maths Compound Interest

Question #444

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The compound interest on a certain sum for 2 years is Rs. 615 and the simple interest for the same period is Rs. 600. Find the rate of interest per annum.

A. 5%

B. 4%

C. 6%

D. 8%

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Correct Answer: Option A

Explanation:
Simple Interest for 1 year = 600 / 2 = Rs. 300. The difference between compound and simple interest is the interest on the first year's interest = 615 - 600 = Rs. 15. Rate of interest = (15 / 300) * 100 = 5%.

This question belongs to: Maths Compound Interest

Question #445

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Find the compound interest on Rs. 20000 for 1 year at 16% per annum, compounded half-yearly.

A. Rs. 3328

B. Rs. 3400

C. Rs. 3500

D. Rs. 3200

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Correct Answer: Option A

Explanation:
Half-yearly rate = 16/2 = 8%. Time = 2 half-years. Amount = 20000 * (1 + 8/100)^2 = 20000 * 1.1664 = Rs. 23328. Compound Interest = 23328 - 20000 = Rs. 3328.

This question belongs to: Maths Compound Interest

Question #446

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At what rate percent per annum will Rs. 64000 amount to Rs. 68921 in 3 years, compound interest compounded annually?

A. 2.5%

B. 6%

C. 5%

D. 4%

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Correct Answer: Option A

Explanation:
Amount/Principal = 68921 / 64000 = (41 / 40)^3. Therefore, 1 + R/100 = 41/40 => R/100 = 1/40 => R = 2.5%.

This question belongs to: Maths Compound Interest

Question #447

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A sum of money amounts to Rs. 9680 after 2 years and to Rs. 10648 after 3 years on compound interest compounded annually. Find the rate of interest per annum.

A. 10%

B. 12%

C. 15%

D. 8%

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Correct Answer: Option A

Explanation:
Interest for the 3rd year = 10648 - 9680 = Rs. 968. Rate of interest = (968 / 9680) * 100 = 10%.

This question belongs to: Maths Compound Interest

Question #448

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If the simple interest on a sum of money for 3 years at 5% per annum is Rs. 1200, find the compound interest on the same sum at the same rate for the same period.

A. Rs. 1240.50

B. Rs. 1301.50

C. Rs. 1261.00

D. Rs. 1280.00

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Correct Answer: Option C

Explanation:
Simple Interest for 1 year = 1200 / 3 = Rs. 400. Principal P = (1200 * 100) / (5 * 3) = Rs. 8000. Amount with compound interest = 8000 * (1 + 5/100)^3 = 8000 * 1.157625 = Rs. 9261. Compound Interest = 9261 - 8000 = Rs. 1261.

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Question #449

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A sum of money placed at compound interest triples itself in 5 years. In how many years will it become 9 times of itself?

A. 12 years

B. 15 years

C. 10 years

D. 8 years

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Correct Answer: Option C

Explanation:
The sum becomes 3^1 times in 5 years. It will become 9 (3^2) times in 2 * 5 = 10 years.

This question belongs to: Maths Compound Interest

Question #450

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The difference between simple interest and compound interest on a certain sum of money for 2 years at 8% per annum is Rs. 128. Find the sum.

A. Rs. 18000

B. Rs. 22000

C. Rs. 20000

D. Rs. 24000

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Correct Answer: Option C

Explanation:
Difference for 2 years = P * (R/100)^2 => 128 = P * (8/100)^2 => 128 = P * (64 / 10000) => P = (128 * 10000) / 64 = Rs. 20000.

This question belongs to: Maths Compound Interest

Question #451

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The compound interest on a certain sum for 2 years at 10% per annum is Rs. 840. Find the principal sum.

A. Rs. 4200

B. Rs. 3800

C. Rs. 4000

D. Rs. 4400

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Correct Answer: Option C

Explanation:
Effective rate of compound interest for 2 years at 10% = 10 + 10 + (1010)/100 = 21%. Given 21% of P = 840 => P = 840 / 0.21 = Rs. 4000.

This question belongs to: Maths Compound Interest

Question #452

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What is the compound interest on Rs. 50000 for 1.5 years at 4% per annum, compounded half-yearly?

A. Rs. 3100.00

B. Rs. 3060.40

C. Rs. 3000.00

D. Rs. 3120.80

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Correct Answer: Option B

Explanation:
Half-yearly rate = 4/2 = 2%. Time = 1.5 years = 3 half-years. Amount = 50000 * (1 + 2/100)^3 = 50000 * (1.02)^3 = 50000 * 1.061208 = Rs. 53060.40. Compound Interest = 53060.40 - 50000 = Rs. 3060.40.

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Question #453

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A sum of money invested at compound interest doubles itself in 7 years. In how many years will it become 8 times of itself?

A. 35 years

B. 21 years

C. 14 years

D. 28 years

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Correct Answer: Option B

Explanation:
The sum doubles (2^1) in 7 years. It will become 8 (2^3) times in 3 * 7 = 21 years.

This question belongs to: Maths Compound Interest

Question #454

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The difference between simple interest and compound interest on a certain sum of money for 3 years at 20% per annum is Rs. 640. Find the sum.

A. Rs. 5000

B. Rs. 4500

C. Rs. 5500

D. Rs. 6000

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Correct Answer: Option A

Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 640 = P * (20/100)^2 * (3 + 20/100) => 640 = P * (1/25) * (3.2) => 640 = P * 0.128 => P = 640 / 0.128 = Rs. 5000.

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Question #455

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At what rate percent per annum will Rs. 8000 amount to Rs. 9261 in 3 years, compound interest compounded annually?

A. 4%

B. 6%

C. 8%

D. 5%

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Correct Answer: Option D

Explanation:
Amount/Principal = 9261 / 8000 = (21 / 20)^3. Therefore, 1 + R/100 = 21/20 => R/100 = 1/20 => R = 5%.

This question belongs to: Maths Compound Interest

Question #456

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The compound interest on a certain sum of money for 2 years at 8% per annum is Rs. 832. What would be the simple interest on the same sum at the same rate for the same time?

A. Rs. 820

B. Rs. 800

C. Rs. 780

D. Rs. 810

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Correct Answer: Option B

Explanation:
Effective rate of compound interest for 2 years at 8% = 8 + 8 + (88)/100 = 16.64%. Simple interest rate = 8 * 2 = 16%. Given 16.64% of sum = 832 => 1% of sum = 50. Simple Interest = 16% of sum = 16 * 50 = Rs. 800.

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Question #457

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Find the compound interest on Rs. 10000 for 1 year at 12% per annum, compounded quarterly.

A. Rs. 1280.00

B. Rs. 1200.00

C. Rs. 1262.00

D. Rs. 1255.09

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Correct Answer: Option D

Explanation:
Quarterly rate = 12 / 4 = 3%. Time = 4 quarters. Amount = 10000 * (1 + 3/100)^4 = 10000 * (1.03)^4 = 10000 * 1.12550881 = Rs. 11255.09. Compound Interest = 11255.09 - 10000 = Rs. 1255.09.

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Question #458

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A sum of money placed at compound interest becomes double of itself in 3 years. In how many years will it become 8 times of itself?

A. 15 years

B. 12 years

C. 6 years

D. 9 years

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Correct Answer: Option D

Explanation:
The sum becomes 2^1 times in 3 years. It will become 8 (2^3) times in 3 * 3 = 9 years.

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Question #459

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The difference between simple interest and compound interest on a certain sum of money for 2 years at 15% per annum is Rs. 144. Find the sum.

A. Rs. 6800

B. Rs. 7200

C. Rs. 6000

D. Rs. 6400

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Correct Answer: Option D

Explanation:
Difference for 2 years = P * (R/100)^2 => 144 = P * (15/100)^2 => 144 = P * (225 / 10000) => P = (144 * 10000) / 225 = 1440000 / 225 = Rs. 6400.

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Question #460

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The compound interest on a certain sum for 2 years at 4% per annum is Rs. 408. Find the principal sum.

A. Rs. 5200

B. Rs. 5400

C. Rs. 5000

D. Rs. 4800

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Correct Answer: Option C

Explanation:
Effective rate of compound interest for 2 years at 4% = 4 + 4 + (44)/100 = 8.16%. Given 8.16% of P = 408 => P = 408 / 0.0816 = Rs. 5000.

This question belongs to: Maths Compound Interest

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