Compound interest questions Practice Question and Answer
8Q: Compounding interest means interest accrues 1534 15b5cc604e4d2b4197774b4b8
5b5cc604e4d2b4197774b4b8- 1at variable rates throughout the termfalse
- 2more quickly than simple interesttrue
- 3more slowly than simple interestfalse
- 4at the same rate as simple interestfalse
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Answer : 2. "more quickly than simple interest"
Explanation :
Answer: B) more quickly than simple interest Explanation: Compounding interest means interest accrues on the interest charged and the principal amount each period the interest is charged. Compound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the loan is then subtracted from the resulting value. The formula for calculating compound interest is: [P (1 + i)n] – P = P [(1 + i)n – 1] (Where P = Principal, i = nominal annual interest rate in percentage terms, and n = number of compounding periods.) Take a three-year loan of Rs. 10,000 at an interest rate of 5% that compounds annually. What would be the amount of interest? In this case, it would be: Rs. 10,000 [(1 + 0.05)3] – 1 = 10,000 [1.157625 – 1] = Rs. 1,576.25. How it grows ::
Q: A man borrows some money at 3% simple interest per annum and lends it to somebody at 5% interest to be compounded annually. By this he makes a profit of Rs.541 at the end of 3 years. The money he borrowed was-
1020 060c199ba590e633a7d3b660e
60c199ba590e633a7d3b660e- 1Rs. 15800false
- 2Rs. 18400false
- 3Rs. 8000true
- 4Rs. 12000false
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Answer : 3. "Rs. 8000 "
Q: Find the difference of CI and SI on a sum of Rs. 30240 invested for 3 years at rate of interest per annum.
4262 160c0a13e590e633a7d38e2b1
60c0a13e590e633a7d38e2b1- 1Rs. 2500false
- 2Rs. 2440false
- 3Rs. 2660true
- 4Rs. 3120false
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Answer : 3. "Rs. 2660"
Q: How much time will it take for an amount of Rs.360 to yield Rs.72 as interest at 5 % p.a of simple interest?
938 160c097fa046ad7381c626c70
60c097fa046ad7381c626c70- 13 yearsfalse
- 24 yearstrue
- 32.5 yearsfalse
- 43.5 yearsfalse
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Answer : 2. "4 years"
Q: A sum of money amounted to Rs.720 in 2 years and Rs.792 in 3 years when interest is compounded annually. The annual rate of interest , (in%) is:
1198 060bf60a7c40f0c12f4b8e8ed
60bf60a7c40f0c12f4b8e8ed- 15%false
- 27.50%false
- 37%false
- 410%true
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Answer : 4. " 10%"
Q: What is the difference between compound interest and simple interest on Rs. 2500 for 2 years at 4% per annum?
783 060be073d5d840673873c4943
60be073d5d840673873c4943- 1₹ 4true
- 2₹ 20false
- 3₹ 40false
- 4₹ 400false
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Answer : 1. "₹ 4 "
Q: If the interest is compounded half yearly, then interest on Rs.16000 at 5% per annum, at the end of $$ {{1}{1\over 2}}$$ years is.
811 060b7158ecef13e72bbf96e1f
60b7158ecef13e72bbf96e1f- 1$$ {1230}{1\over 4}$$true
- 2$$ {1210}{1\over 4}$$false
- 3$$ {1215}{1\over 4}$$false
- 4$$ {1225}{1\over 4}$$false
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Answer : 1. "$$ {1230}{1\over 4}$$"
Q: A sum of money was lent at 10% per annum, compounded annually, for 2 years. If the interest was compounded half - yearly, he would have received Rs.660.75 more. Find the sum.
949 060b6e136cef13e72bbf8eb27
60b6e136cef13e72bbf8eb27- 1120000false
- 2124000false
- 3104400true
- 4150000false
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