Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #561

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At what rate percent per annum will Rs. 20000 amount to Rs. 23328 in 2 years, compound interest compounded annually?

A. 12%

B. 10%

C. 6%

D. 8%

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Correct Answer: Option D

Explanation:
Amount/Principal = 23328 / 20000 = 11664 / 10000 = (108 / 100)^2. Therefore, 1 + R/100 = 1.08 => R = 8%.

This question belongs to: Maths Compound Interest

Question #562

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The compound interest on a certain sum of money for 2 years at 5% per annum is Rs. 1025. What would be the simple interest on the same sum at the same rate for the same time?

A. Rs. 1010

B. Rs. 980

C. Rs. 1000

D. Rs. 1020

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Correct Answer: Option C

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 = 1025 => 1% of sum = 100. Simple Interest = 10% of sum = 10 * 100 = Rs. 1000.

This question belongs to: Maths Compound Interest

Question #563

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

A. Rs. 824.32

B. Rs. 840.00

C. Rs. 800.00

D. Rs. 850.50

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Correct Answer: Option A

Explanation:
Quarterly rate = 8 / 4 = 2%. Time = 4 quarters. Amount = 10000 * (1 + 2/100)^4 = 10000 * (1.02)^4 = 10000 * 1.082432 = Rs. 10824.32. Compound Interest = 10824.32 - 10000 = Rs. 824.32.

This question belongs to: Maths Compound Interest

Question #564

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

A. 10 years

B. 15 years

C. 20 years

D. 25 years

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Correct Answer: Option B

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

This question belongs to: Maths Compound Interest

Question #565

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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. 144. Find the sum.

A. Rs. 64000

B. Rs. 57600

C. Rs. 60000

D. Rs. 55000

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Correct Answer: Option B

Explanation:
Difference for 2 years = P * (R/100)^2 => 144 = P * (5/100)^2 => 144 = P * (25 / 10000) => P = (144 * 10000) / 25 = Rs. 57600.

This question belongs to: Maths Compound Interest

Question #566

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The compound interest on a certain sum for 2 years at 4% per annum is Rs. 1632. Find the principal sum.

A. Rs. 20000

B. Rs. 22000

C. Rs. 24000

D. Rs. 18000

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Correct Answer: Option A

Explanation:
Effective rate of compound interest for 2 years at 4% = 4 + 4 + (44)/100 = 8.16%. Given 8.16% of P = 1632 => P = 1632 / 0.0816 = Rs. 20000.

This question belongs to: Maths Compound Interest

Question #567

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A sum of money invested at compound interest doubles itself in 6 years. In how many years will it become 4 times of itself?

A. 9 years

B. 15 years

C. 18 years

D. 12 years

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Correct Answer: Option D

Explanation:
The sum doubles (2^1) in 6 years. It will become 4 (2^2) times in 2 * 6 = 12 years.

This question belongs to: Maths Compound Interest

Question #568

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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. 124. Find the sum.

A. Rs. 4000

B. Rs. 3500

C. Rs. 5000

D. Rs. 4500

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Correct Answer: Option A

Explanation:
Difference for 3 years = P * (R/100)^2 * (3 + R/100) => 124 = P * (10/100)^2 * (3 + 10/100) => 124 = P * (1/100) * (3.1) => 124 = P * 0.031 => P = 124 / 0.031 = Rs. 4000.

This question belongs to: Maths Compound Interest

Question #569

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At what rate percent per annum will Rs. 10000 amount to Rs. 12100 in 2 years, compound interest compounded annually?

A. 12%

B. 14%

C. 10%

D. 8%

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Correct Answer: Option C

Explanation:
Amount/Principal = 12100 / 10000 = (11 / 10)^2. Therefore, 1 + R/100 = 11/10 => R/100 = 1/10 => R = 10%.

This question belongs to: Maths Compound Interest

Question #570

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The difference between simple interest and compound interest on a certain sum of money for 2 years at 10% per annum is Rs. 25. Find the sum.

A. Rs. 2200

B. Rs. 2500

C. Rs. 3000

D. Rs. 2700

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Correct Answer: Option B

Explanation:
Difference for 2 years = P * (R/100)^2 => 25 = P * (10/100)^2 => 25 = P * 0.01 => P = Rs. 2500.

This question belongs to: Maths Compound Interest

Question #571

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The compound interest on a certain sum for 2 years at 5% per annum is Rs. 410. Find the principal sum.

A. Rs. 3800

B. Rs. 4000

C. Rs. 4400

D. Rs. 4200

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Correct Answer: Option B

Explanation:
Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 410 => P = 410 / 0.1025 = Rs. 4000.

This question belongs to: Maths Compound Interest

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