Problems On Compound Interest

Problems On Compound Interest

Learn and practice Problems on compound interest with easy explaination and shortcut tricks. All questions and answers covered for various Competitive Exams

Solve Problems on compound interest:

1) What is the compound interest on Rs. 2500 for 2 years at rate of interest 4% per annum?

  1. Rs. 180
  2. Rs. 204
  3. Rs. 210
  4. Rs. 220
View Answer

The Correct answer is (B)

Explanation:

Principal (P) = Rs. 2500

Rate of interest(r) = 4%

Time (t) = 2 years

Compound Interest = Amount – Principal

2) What is the amount for a sum of money Rs.7500 at 6% rate of interest C.I. for 2 years?

  1. Rs. 8427
  2. Rs. 8417
  3. Rs. 8400
  4. Rs. 8390
View Answer

The Correct answer is (A)

Explanation:

Principal = Rs. 7500

r = 6%

t = 2 years

3) On lending a certain sum of money on C.I. one gets Rs.9050 in 2 years and Rs.9500 in 3 years. What is the rate of interest?

  1. 5%
  2. 4.5%
  3. 5.5 %
  4. 6%
View Answer

The Correct answer is (A)

Explanation:

Amount after 3 years = Rs. 9500

Amount after 2 years = Rs. 9050

Interest of one year= 9500 – 9050 = 450

t = 1 year

Solution 2: Quicker Method

Apply formula; Rate of interest(r): (Y-X)*100/X

Y= Rs. 9500

X = 9050

r={(9500-9050)*100}/9050

=(450*100)/9050

=5%

4) Ramesh borrowed Rs. 3600 at a certain rate of interest C.I. and the sum grows to Rs. 4624 in 2 years. What is the rate of interest?

  1. 12.3%
  2. 13.3%
  3. 14.3%
  4. 15.3%
View Answer

The Correct answer is (B)

Explanation:

Principal = Rs. 3600

Amount = Rs. 4624

t = 2 years

We have;

5) On a certain sum of money the compound interest Rs. 318 is earned in 2 years. If the rate of interest is 12%, what is the principal amount?

  1. Rs. 1250
  2. Rs.1300
  3. Rs. 1200
  4. Rs. 1150
View Answer

The Correct answer is (A)

Explanation:

We have;

C.I. = Rs. 318

r = 12%

t = 2 years

Try to solve more problems on compound interest.

6) The simple interest on a certain sum of money at rate of interest 5% per annum for 2 years is Rs. 500. What is the compound interest on the same sum for the same period and at the same rate of interest?

  1. Rs.412.5
  2. Rs.400
  3. Rs.500
  4. Rs.512.5
View Answer

The Correct answer is (D)

Explanation:

S.I. = 500

r = 5%

t = 2 years

Before finding C.I. we have to find the sum or principal;

Apply formula; Principal = (I*100)/(r*t)
Principal = (500*100)/(5*2)= Rs. 5000

Now we have to find the Amount;

Apply formula; Amount =P(1+r/100)^3

Amount = 5000(1+5/100)^2

=(105/100  *  105/100)

= 5000 * 1.05 * 1.05 = Rs. 5512.5

C.I. = Amount – Principal

C.I. = 5512.5 – 5000 = Rs. 512.5 (Option D)

7) In how many years the compound interest on Rs. 10000 at the rate of 10% will be Rs. 2100 ?

  1. 1.5 years
  2. 2 years
  3. 2.5 years
  4. 3 years
View Answer

The Correct answer is (B)

Explanation:

Principal = Rs. 10000

r = 10%

C.I. = Rs. 2100

8) The difference between Simple Interest and Compound Interest on a certain sum of money for 2 years is Rs.200. If the rate of interest is 12 %, what is the sum?

  1. Rs. 11800
  2. Rs. 12000
  3. Rs. 12800
  4. Rs. 13000
View Answer

The Correct answer is (C)

Explanation:

If the difference between the C.I. and S.I. on a certain sum of money for 2 years at rate of interest r % is Rs. X, then the sum is given by;

Sum = X(100/r)^2

We have;

X = Rs. 200

t = 2 years

r = 12/2=25/2 %
Therefore, Sum = 200{100/(25/2)}^2 

= 200 * (200/25)^2

= 200 *200/25 * 200/25

= 200 * 64

= Rs. 12800 (Option C)

9) If the difference between Simple Interest and Compound Interest on a sum of money for 3 years is Rs. 200 and the rate of interest is 10%, what is the sum?

  1. Rs. 6451.6
  2. Rs. 6351.6
  3. Rs. 6251.6
  4. Rs. 6151.6
View Answer

The Correct answer is (A)

Explanation:

If the difference between C.I. and S.I. on a certain sum for 3 years at rate of interest r% is Rs. X, then the sum is given by;

Sum = {x*100^3}/{r^2(300+r)}

We have;

X = Rs. 200

r = 10%
Therefore, sum = (200* 100^3)/ {(10^2) (300+10)}

=(200*100*100*100)/(10*10*310)

=2000000/310

= Rs. 6451.6

10) The difference between simple interest and compound interest on a sum of money for 1 year at 4% per 6 months is 4, what is the sum?

  1. Rs. 2100
  2. Rs. 2300
  3. Rs. 2500
  4. Rs. 3000
View Answer

The Correct answer is (C)

Explanation:

Let the sum = Rs. X

t = 1 year = 2 half years (6 months)

r = 4% for 6 months

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