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

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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. 4800

C. Rs. 5000

D. Rs. 5400

Answer: Option C

Solution (By JKSSB Mock Tests)

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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Question #1

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What is the compound interest on Rs. 20000 for 1 year at 12% per annum, compounded half-yearly?

A. Rs. 2500

B. Rs. 2472

C. Rs. 2400

D. Rs. 2600

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Correct Answer: Option B

Explanation:
Half-yearly rate = 12/2 = 6%. Time = 2 half-years. Amount = 20000 * (1 + 6/100)^2 = 20000 * 1.1236 = Rs. 22472. Compound Interest = 22472 - 20000 = Rs. 2472.

This question belongs to: Maths Compound Interest

Question #2

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Find the compound interest on Rs. 10000 for 1 year at 20% per annum, compounded quarterly.

A. Rs. 2250.00

B. Rs. 2155.06

C. Rs. 2200.00

D. Rs. 2000.00

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Correct Answer: Option B

Explanation:
Quarterly rate = 20 / 4 = 5%. Time = 4 quarters. Amount = 10000 * (1 + 5/100)^4 = 10000 * (1.05)^4 = 10000 * 1.21550625 = Rs. 12155.06. Compound Interest = 12155.06 - 10000 = Rs. 2155.06.

This question belongs to: Maths Compound Interest