Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #481

The difference between simple interest and compound interest on a certain sum of money for 3 years at 10% per annum is Rs. 155. Find the sum.

A. Rs. 6000

B. Rs. 5500

C. Rs. 4500

D. Rs. 5000

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Correct Answer: Option D

Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 155 = P * (10/100)^2 * (3 + 10/100) => 155 = P * (1/100) * (3.1) => 155 = P * 0.031 => P = 155 / 0.031 = Rs. 5000.

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Question #482

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At what rate percent per annum will Rs. 25000 amount to Rs. 29160 in 2 years, compound interest compounded annually?

A. 12%

B. 8%

C. 10%

D. 6%

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Correct Answer: Option B

Explanation:
Amount/Principal = 29160 / 25000 = 2916 / 2500 = (54 / 50)^2 = (1.08)^2. Therefore, 1 + R/100 = 1.08 => R = 8%.

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Question #483

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The compound interest on a certain sum of money for 2 years at 4% per annum is Rs. 204. What would be the simple interest on the same sum at the same rate for the same time?

A. Rs. 203

B. Rs. 202

C. Rs. 195

D. Rs. 200

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Correct Answer: Option D

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 = 204 => 1% of sum = 25. Simple Interest = 8% of sum = 8 * 25 = Rs. 200.

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Question #484

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Find the compound interest on Rs. 10000 for 1 year at 4% per annum, compounded quarterly.

A. Rs. 400.00

B. Rs. 406.04

C. Rs. 412.20

D. Rs. 410.00

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Correct Answer: Option B

Explanation:
Quarterly rate = 4 / 4 = 1%. Time = 4 quarters. Amount = 10000 * (1 + 1/100)^4 = 10000 * (1.01)^4 = 10000 * 1.04060401 = Rs. 10406.04. Compound Interest = 10406.04 - 10000 = Rs. 406.04.

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Question #485

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A sum of money placed at compound interest becomes double of itself in 10 years. In how many years will it become 8 times of itself?

A. 40 years

B. 30 years

C. 50 years

D. 20 years

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Correct Answer: Option B

Explanation:
The sum becomes 2^1 times in 10 years. It will become 8 (2^3) times in 3 * 10 = 30 years.

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Question #486

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The difference between simple interest and compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 25. Find the sum.

A. Rs. 12000

B. Rs. 11000

C. Rs. 9000

D. Rs. 10000

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Correct Answer: Option D

Explanation:
Difference for 2 years = P * (R/100)^2 => 25 = P * (5/100)^2 => 25 = P * (25 / 10000) => P = Rs. 10000.

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Question #487

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The compound interest on a certain sum for 2 years at 12% per annum is Rs. 508.80. Find the principal sum.

A. Rs. 2200

B. Rs. 1800

C. Rs. 2400

D. Rs. 2000

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Correct Answer: Option D

Explanation:
Effective rate of compound interest for 2 years at 12% = 12 + 12 + (1212)/100 = 25.44%. Given 25.44% of P = 508.80 => P = 508.80 / 0.2544 = Rs. 2000.

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Question #488

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What is the compound interest on Rs. 40000 for 1 year at 8% per annum, compounded half-yearly?

A. Rs. 3400

B. Rs. 3200

C. Rs. 3264

D. Rs. 3300

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Correct Answer: Option C

Explanation:
Half-yearly rate = 8/2 = 4%. Time = 2 half-years. Amount = 40000 * (1 + 4/100)^2 = 40000 * 1.0816 = Rs. 43264. Compound Interest = 43264 - 40000 = Rs. 3264.

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Question #489

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A sum of money invested at compound interest doubles itself in 15 years. In how many years will it become 4 times of itself?

A. 45 years

B. 20 years

C. 60 years

D. 30 years

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Correct Answer: Option D

Explanation:
The sum doubles (2^1) in 15 years. It will become 4 (2^2) times in 2 * 15 = 30 years.

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Question #490

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The difference between simple interest and compound interest on a certain sum of money for 3 years at 5% per annum is Rs. 61. Find the sum.

A. Rs. 8000

B. Rs. 8500

C. Rs. 7500

D. Rs. 9000

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Correct Answer: Option A

Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 61 = P * (5/100)^2 * (3 + 5/100) => 61 = P * (1/400) * (3.05) => P = (61 * 400) / 3.05 = 24400 / 3.05 = Rs. 8000.

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Question #491

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At what rate percent per annum will Rs. 10000 amount to Rs. 11664 in 2 years, compound interest compounded annually?

A. 6%

B. 8%

C. 10%

D. 12%

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Correct Answer: Option B

Explanation:
Amount/Principal = 11664 / 10000. Taking square root: sqrt(11664/10000) = 108 / 100 = 1.08. Therefore, 1 + R/100 = 1.08 => R = 8%.

This question belongs to: Maths Compound Interest

Question #492

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The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 164. What would be the simple interest on the same sum at the same rate for the same time?

A. Rs. 155

B. Rs. 163

C. Rs. 162

D. Rs. 160

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Correct Answer: Option D

Explanation:
Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Simple interest rate = 5 * 2 = 10%. Given 10.25% of sum = 164 => 1% of sum = 16. Simple Interest = 10% of sum = 10 * 16 = Rs. 160.

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Question #493

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Find the compound interest on Rs. 20000 for 1 year at 8% per annum, compounded quarterly.

A. Rs. 1600.00

B. Rs. 1648.64

C. Rs. 1712.30

D. Rs. 1680.00

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Correct Answer: Option B

Explanation:
Quarterly rate = 8 / 4 = 2%. Time = 4 quarters. Amount = 20000 * (1 + 2/100)^4 = 20000 * (1.02)^4 = 20000 * 1.08243216 = Rs. 21648.64. Compound Interest = 21648.64 - 20000 = Rs. 1648.64.

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Question #494

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A sum of money placed at compound interest becomes double of itself in 2 years. In how many years will it become 16 times of itself?

A. 6 years

B. 12 years

C. 10 years

D. 8 years

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Correct Answer: Option D

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

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Question #495

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The difference between simple interest and compound interest on a certain sum of money for 2 years at 6% per annum is Rs. 36. Find the sum.

A. Rs. 11000

B. Rs. 10000

C. Rs. 9000

D. Rs. 12000

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Correct Answer: Option B

Explanation:
Difference for 2 years = P * (R/100)^2 => 36 = P * (6/100)^2 => 36 = P * (36 / 10000) => P = Rs. 10000.

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Question #496

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The compound interest on a certain sum for 2 years at 10% per annum is Rs. 210. Find the principal sum.

A. Rs. 1100

B. Rs. 1000

C. Rs. 950

D. Rs. 1050

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Correct Answer: Option B

Explanation:
Effective rate of compound interest for 2 years at 10% = 10 + 10 + (1010)/100 = 21%. Given 21% of P = 210 => P = 210 / 0.21 = Rs. 1000.

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Question #497

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What is the compound interest on Rs. 10000 for 1 year at 16% per annum, compounded half-yearly?

A. Rs. 1600

B. Rs. 1700

C. Rs. 1664

D. Rs. 1750

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Correct Answer: Option C

Explanation:
Half-yearly rate = 16/2 = 8%. Time = 2 half-years. Amount = 10000 * (1 + 8/100)^2 = 10000 * 1.1664 = Rs. 11664. Compound Interest = 11664 - 10000 = Rs. 1664.

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Question #498

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

A. 15 years

B. 25 years

C. 10 years

D. 20 years

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Correct Answer: Option A

Explanation:
The sum doubles (2^1) in 5 years. It will become 8 (2^3) times in 3 * 5 = 15 years.

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Question #499

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The difference between simple interest and compound interest on a certain sum of money for 3 years at 10% per annum is Rs. 31. Find the sum.

A. Rs. 800

B. Rs. 1000

C. Rs. 1200

D. Rs. 1500

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Correct Answer: Option B

Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 31 = P * (10/100)^2 * (3 + 10/100) => 31 = P * (1/100) * (3.1) => 31 = P * 0.031 => P = 31 / 0.031 = Rs. 1000.

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Question #500

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At what rate percent per annum will Rs. 8000 amount to Rs. 8820 in 2 years, compound interest compounded annually?

A. 5%

B. 8%

C. 4%

D. 6%

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Correct Answer: Option A

Explanation:
Amount/Principal = 8820 / 8000 = 882 / 800 = 441 / 400 = (21 / 20)^2. Therefore, 1 + R/100 = 21/20 => R/100 = 1/20 => R = 5%.

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