Compound Interest MCQs with Answers and Solutions for Competitive Exams

Question #101

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At what rate of compound interest will Rs. 2000 amount to Rs. 2205 in 2 years?

A. 4%

B. 7%

C. 5%

D. 6%

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Correct Answer: Option C

Explanation:
2000(1+r)² = 2205 ⇒ (1+r)² = 1.1025 = (1.05)² ⇒ r = 5%.

This question belongs to: Maths Compound Interest

Question #102

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Find the principal if the compound interest at 10% per annum for 2 years is Rs. 630.

A. Rs. 3200

B. Rs. 3000

C. Rs. 2800

D. Rs. 3500

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Correct Answer: Option B

Explanation:
CI = P × 0.21 = 630 ⇒ P = 630 / 0.21 = 3000.

This question belongs to: Maths Compound Interest

Question #103

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A sum amounts to Rs. 1331 in 3 years and Rs. 1464.10 in 4 years at compound interest. Find the sum.

A. Rs. 1100

B. Rs. 900

C. Rs. 1000

D. Rs. 800

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Correct Answer: Option C

Explanation:
Rate = (1464.10/1331 − 1) × 100 = 10%. P = 1331 / (1.1)³ = 1331 / 1.331 = 1000.

This question belongs to: Maths Compound Interest

Question #104

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The effective annual rate of interest for 8% per annum compounded quarterly is:

A. 8.16%

B. 8.24%

C. 8.42%

D. 8.30%

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Correct Answer: Option B

Explanation:
Quarterly rate 2%, (1.02)⁴ = 1.08243216, effective = 8.2432% ≈ 8.24%.

This question belongs to: Maths Compound Interest

Question #105

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Find the compound interest on Rs. 4500 at 8% per annum for 2 years.

A. Rs. 748.80

B. Rs. 756.00

C. Rs. 760.00

D. Rs. 752.40

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Correct Answer: Option A

Explanation:
A = 4500 × (1.08)² = 4500 × 1.1664 = 5248.80, CI = 5248.80 − 4500 = Rs. 748.80.

This question belongs to: Maths Compound Interest

Question #106

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If the compound interest on a sum for 2 years at 5% is Rs. 307.50, the simple interest on the same sum for 2 years at 5% is:

A. Rs. 310

B. Rs. 300

C. Rs. 280

D. Rs. 290

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Correct Answer: Option B

Explanation:
CI = P × 0.1025 = 307.50 ⇒ P = 3000. SI = 3000 × 5 × 2 / 100 = Rs. 300.

This question belongs to: Maths Compound Interest

Question #107

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A sum of money at compound interest becomes 2.25 times in 2 years. The rate of interest is:

A. 50%

B. 40%

C. 45%

D. 55%

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Correct Answer: Option A

Explanation:
(1+r)² = 2.25 ⇒ 1+r = 1.5 ⇒ r = 50%.

This question belongs to: Maths Compound Interest

Question #108

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The compound interest on Rs. 500 for 2 years at 4% per annum is:

A. Rs. 42.40

B. Rs. 41.60

C. Rs. 40.80

D. Rs. 40.00

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Correct Answer: Option C

Explanation:
A = 500 × (1.04)² = 500 × 1.0816 = 540.80, CI = 540.80 − 500 = Rs. 40.80.

This question belongs to: Maths Compound Interest

Question #109

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In how many years will Rs. 800 amount to Rs. 882 at 5% per annum compound interest?

A. 2 years

B. 1 year

C. 3 years

D. 4 years

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Correct Answer: Option A

Explanation:
800(1.05)^t = 882 ⇒ (1.05)^t = 1.1025 = (1.05)² ⇒ t = 2.

This question belongs to: Maths Compound Interest

Question #110

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The difference between CI and SI on Rs. 2000 for 2 years at 4% per annum is:

A. Rs. 3.60

B. Rs. 4.80

C. Rs. 3.20

D. Rs. 4.00

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Correct Answer: Option C

Explanation:
D = 2000 × (0.04)² = 2000 × 0.0016 = Rs. 3.20.

This question belongs to: Maths Compound Interest

Question #111

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A sum of money placed at compound interest doubles itself in 4 years. In how many years will it amount to 8 times itself?

A. 12 years

B. 10 years

C. 8 years

D. 16 years

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Correct Answer: Option A

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

This question belongs to: Maths Compound Interest

Question #112

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The compound interest on Rs. 3000 at 8% per annum for 1 year compounded half-yearly is:

A. Rs. 243.60

B. Rs. 248.00

C. Rs. 240.00

D. Rs. 244.80

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Correct Answer: Option D

Explanation:
Half-yearly rate 4%, n=2. A = 3000 × (1.04)² = 3000 × 1.0816 = 3244.80, CI = 3244.80 − 3000 = Rs. 244.80.

This question belongs to: Maths Compound Interest

Question #113

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What sum will amount to Rs. 14520 in 2 years at 10% per annum compound interest?

A. Rs. 12000

B. Rs. 13000

C. Rs. 11000

D. Rs. 14000

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Correct Answer: Option A

Explanation:
P = 14520 / (1.1)² = 14520 / 1.21 = 12000.

This question belongs to: Maths Compound Interest

Question #114

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The compound interest on a sum for 2 years at 12% is Rs. 636. The sum is:

A. Rs. 2500

B. Rs. 2400

C. Rs. 2000

D. Rs. 2600

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Correct Answer: Option A

Explanation:
CI = P[(1.12)² − 1] = P × 0.2544 = 636 ⇒ P = 636/0.2544 = 2500.

This question belongs to: Maths Compound Interest

Question #115

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The population of a village increases at 5% per annum. If the present population is 4410, what was it 2 years ago?

A. 3800

B. 4100

C. 3900

D. 4000

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Correct Answer: Option D

Explanation:
Population 2 years ago = 4410 / (1.05)² = 4410 / 1.1025 = 4000.

This question belongs to: Maths Compound Interest

Question #116

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A machine depreciates at 5% per annum. Its present value is Rs. 5415. What was its value 2 years ago?

A. Rs. 6200

B. Rs. 5800

C. Rs. 6400

D. Rs. 6000

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Correct Answer: Option D

Explanation:
Value 2 years ago = 5415 / (0.95)² = 5415 / 0.9025 = 6000.

This question belongs to: Maths Compound Interest

Question #117

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Find the compound interest on Rs. 7200 at 5% per annum for 2 years.

A. Rs. 740

B. Rs. 742

C. Rs. 738

D. Rs. 744

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Correct Answer: Option C

Explanation:
A = 7200 × (1.05)² = 7200 × 1.1025 = 7938, CI = 7938 − 7200 = Rs. 738.

This question belongs to: Maths Compound Interest

Question #118

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At what rate percent will Rs. 1500 become Rs. 1653.75 in 2 years at compound interest?

A. 5%

B. 7%

C. 6%

D. 4%

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Correct Answer: Option A

Explanation:
1500(1+r)² = 1653.75 ⇒ (1+r)² = 1.1025 = (1.05)² ⇒ r = 5%.

This question belongs to: Maths Compound Interest

Question #119

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The compound interest on Rs. 1000 at 10% per annum for 2 years compounded half-yearly is:

A. Rs. 215.50

B. Rs. 225

C. Rs. 220

D. Rs. 210

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Correct Answer: Option A

Explanation:
Half-yearly rate 5%, n=4. A = 1000 × (1.05)⁴ = 1000 × 1.21550625 = 1215.50625, CI ≈ Rs. 215.50.

This question belongs to: Maths Compound Interest

Question #120

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The simple interest on a sum for 2 years at 6% is Rs. 360. The compound interest for the same period and rate is:

A. Rs. 372.00

B. Rs. 378.00

C. Rs. 370.80

D. Rs. 375.00

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Correct Answer: Option C

Explanation:
P = 36000/(6×2) = 3000. CI = 3000[(1.06)² − 1] = 3000 × 0.1236 = Rs. 370.80.

This question belongs to: Maths Compound Interest

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