The compound interest on a certain sum for 2 years at 5% per annum is Rs. 820. Find the principal sum. MCQ with Answer and Explanation

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The compound interest on a certain sum for 2 years at 5% per annum is Rs. 820. Find the principal sum.

A. Rs. 8500

B. Rs. 8000

C. Rs. 9000

D. Rs. 7500

Answer: Option B

Solution (By JKSSB Mock Tests)

Effective rate of compound interest for 2 years at 5% = 5 + 5 + (55)/100 = 10.25%. Given 10.25% of P = 820 => P = 820 / 0.1025 = Rs. 8000.

This question belongs to: Maths Compound Interest

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Question #1

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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. 4%

B. 5%

C. 6%

D. 8%

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Correct Answer: Option B

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

This question belongs to: Maths Compound Interest

Question #2

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The compound interest on a sum for 3 years at 10% is Rs. 993. The sum is:

A. Rs. 2700

B. Rs. 3600

C. Rs. 3300

D. Rs. 3000

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Correct Answer: Option D

Explanation:
CI = P[(1.1)³ − 1] = P × 0.331 = 993 ⇒ P = 993 / 0.331 = 3000.

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Question #3

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The difference between CI and SI on Rs. 6000 for 2 years at 5% is:

A. Rs. 18

B. Rs. 12

C. Rs. 20

D. Rs. 15

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Correct Answer: Option D

Explanation:
D = 6000 × (0.05)² = 6000 × 0.0025 = Rs. 15.

This question belongs to: Maths Compound Interest

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