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Aptitude Compound Interest Question and Answer

1)If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 60, what is the compound interest on the same at the same rate and for the same time?
A. Rs. 63.5
B. Rs. 62
C. Rs. 61.5
D. Rs. 64

Answer:C. Rs. 61.5

Explanation:

Sum, P =
100×SI / RT
=
100×60 / 5×2
=Rs. 600
Amount after 2 years on Rs.600 at 5% per annum when interest is compounded annually
= P(1+
R / 100
)T
=600(1+
5 / 100
)2
=600(
105 / 100
)2=
600×105×105 / 100×100
=
6×105×105 / 100
=Rs. 661.5
Compound Interest = 661.5 - 600 = 61.5

2)The difference between simple interest and compound on Rs. 900 for one year at 10% per annum reckoned half-yearly is:
A. Rs. 3
B. Rs. 2.25
C. Rs. 4.5
D. Rs. 4

Answer:B. Rs. 2.25

Explanation:

Simple Interest =
PRT / 100
=
900×10×1 / 100
= Rs. 90
Amount after 1 year on Rs.900 at 10% per annum when interest is reckoned half-yearly
=P(1+
(R/2) / 100
)2T = 900(1+
(10/2) / 100
)2 x 1
900 ( 1 +
5 / 100
)2 = 900(
105 / 100
)2 = Rs. 992.25
Compound Interest = 992.25 - 900 = 92.25
Required difference between simple interest and compound interest = 92.25 - 90 = Rs.2.25

3) John invested amount of 8000 in a fixed deposit for 2 years at compound interest rate of 5 % per annum. How much John will get on the maturity of the fixed deposit.
A. Rs. 8510
B. Rs. 8620
C. Rs. 8730
D. Rs. 8820

Answer:D. Rs. 8820

Explanation:

(8000×(1+
5 / 100
)2)
8000 x
21 / 20
x
21 / 20
=8820

4)The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:
A)6.06%
B) 6.07%
C) 6.08%
D) 6.09%

Answer:D) 6.09%

Explanation:
Amount of Rs. 100 for 1 year when compounded half-yearly

= Rs.[100 x (1 +
3 / 100
)2 ] = Rs. 106.09
Effective rate = (106.09 - 100)% = 6.09%

5)The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned half-yearly is:
A)Rs. 2.50
B)Rs. 3
C)Rs. 3.75
D) Rs. 4

Answer:B)Rs. 3

Explanation:

S.I. = Rs (
1200 x 10 x 1 / 100
= Rs. 120.
C.I. = Rs.[1200 x (1 +
5 / 100
)2 - 1200 ] = = Rs. 123.
Difference = Rs. (123 - 120) = Rs. 3.






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