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Quant – Compound Interest – Set 4
Read the following instructions carefully
- The test contains 10 questions.
- Each question has 4 options, of which only one is correct.
- You have to finish the test in 8 minutes.
- You are awarded 1 mark for each correct answer, and 0.25 marks are deducted for each wrong answer.
- There is no negative marking for questions you do not attempt.
- You may pause the test at any time and resume where you left off.
- Your marks, the correct answers and an explanation for every question are shown as soon as you submit.
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Review this set's questions and answers (opens after you submit the test)
This free practice set from AndamanJobs has 10 questions to be solved in 8 minutes. Every question is listed below with four options. Open Show answer and explanation under a question to see the correct option and why it is correct. Try the timed test above first, then use this list to revise the questions you got wrong.
- The compound interest on Rs 6,000 at 10% per annum for 1 1/2 years, when the interest is compounded annually, is:
- A. Rs. 910
- B. Rs. 900
- C. Rs. 870
- D. Rs. 930
Show answer and explanation
Answer: D. Rs. 930
Year 1: 6000 × 1.1 = 6,600. Next half year at 5%: 6,600 × 1.05 = 6,930. Interest = Rs 930.
- The simple interest on a sum of money at 4% per annum for 2 years is Rs. 80. The compound interest in the same sum for the same period is :
- A. Rs. 81.60
- B. Rs. 82.20
- C. Rs. 81.80
- D. Rs. 82.60
Show answer and explanation
Answer: A. Rs. 81.60
SI = 80 for 2 years, so the sum = 1,000. CI = 1000 × (1.04² - 1) = Rs 81.60.
- The simple interest and compound interest (compounded annually) on a certain sum of money with a given rate for a period of 2 years are Rs. 900 and Rs. 954 respectively. The sum of money is :
- A. Rs. 3750
- B. Rs. 3650
- C. Rs. 3700
- D. Rs. 3850
Show answer and explanation
Answer: A. Rs. 3750
SI for 1 year = 450. CI - SI for 2 years = 54 = 450 × r, so r = 12%. The sum = 450 / 0.12 = Rs 3,750.
- Kamal took Rs 6,800 as a loan which along with interest is to be repaid in two equal annual instalments. If the rate of interest is 12 1/2 %, compounded annually, then the value of each instalment is:
- A. Rs. 8100
- B. Rs. 4000
- C. Rs. 4050
- D. Rs. 4150
Show answer and explanation
Answer: C. Rs. 4050
x/1.125 + x/1.125² = 6,800. So x × 1.679 = 6,800 and x = Rs 4,050.
- A sum of Rs 13,360 was borrowed at 8 3/4 % per annum compound interest and paid back in two years in two equal annual instalments. What was the amount of each instalment?
- A. Rs. 7,500
- B. Rs. 7,569
- C. Rs. 5,769
- D. Rs. 7,009
Show answer and explanation
Answer: B. Rs. 7,569
With the rate 8 3/4 % (factor 1.0875): x/1.0875 + x/1.0875² = 13,360. So x × 1.7651 = 13,360 and x = Rs 7,569.
- A loan of Rs. 12,300 at 5% per annum compound interest, is to be repaid in two equal annual installments at the end of every year. Find the amount of each installment.
- A. Rs. 6,651
- B. Rs. 6,615
- C. Rs. 6,516
- D. Rs. 6,156
Show answer and explanation
Answer: B. Rs. 6,615
x/1.05 + x/1.05² = 12,300. So x × 1.8594 = 12,300 and x = Rs 6,615.
- At what rate per cent per annum will a sum of Rs. 1,000 amount to Rs. 1,102.50 in 2 years at compound interest ?
- A. 5.5%
- B. 6.5%
- C. 6%
- D. 5%
Show answer and explanation
Answer: D. 5%
1102.50 / 1000 = 1.1025 = (1.05)², so the rate is 5%.
- In how many years will a sum of Rs. 800 at 10% per annum compound interest, compounded semi-annually, become Rs. 926.10 ?
- A. 2 1/3 years
- B. 1 1/2 years
- C. 1 2/3 years
- D. 2 1/2 years
Show answer and explanation
Answer: B. 1 1/2 years
926.10 / 800 = 1.157625 = (1.05)³. That is 3 half-years = 1 1/2 years.
- At what rate percent per annum of compound interest, will a sum of money become four times of itself in two years ?
- A. 75%
- B. 20%
- C. 100%
- D. 50%
Show answer and explanation
Answer: C. 100%
(1 + r)² = 4, so 1 + r = 2 and r = 100%.
- The difference between the compound interest and simple interest on Rs. 10,000 for 2 years is 25. The rate of interest per annum is :
- A. 10%
- B. 12%
- C. 5%
- D. 7%
Show answer and explanation
Answer: C. 5%
Difference = 10,000 × (r/100)² = 25, so r² = 25 and r = 5%.