Compound Interest Questions & Answers

Practice essential Compound Interest questions so that you can answer them correctly in the exams. Compound Interest questions and answers are given a medium weightage in the exam and therefore must be revised.

Concepts

Formulas

Practice Questions

Q1 The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half-yearly is:

6.06%

6.07%

6.08%

6.09%

Q2 At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?

6.50%

7.50%

Q3 At what percent annum will Rs. 3,000 amount to Rs. 3,993 in 3 years if the interest is compounded annually?

10%

12%

Q4 The difference between the compound interest and simple interest on certain sum at 10% per annum for 2 years is Rs. 631. What is the sum?

63100

56000

42160

68000

Q5 A man deposited Rs.40,000 in a bank at 10% per annum interest compounded yearly. Now after two years, the government comes out with a law that any annual interest greater than Rs.2500 will be taxed at the end of the year. Also, the rate of interest is decreased to 8%. How much should the man withdraw now so as, not to pay tax at the end of the year?

25000

24000

18175

17150

Q6 A certain sum becomes 8 times itself in 3 years under compound interest, interest being compounded annually. How many years would the sum takes to become 64 times itself?

6 years

4 years

8 years

5 years

Q7 Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit?

6060

8788

8800

8820

Q8 What is the compound interest on Rs. 5,000 for 1 1/2years at 4 percent per annum according as the interest is compounded yearly?

304

307

308

309

Q9 The principal amount that becomes Rs. 4913 in 3 years at interest rate of 25/4% per annum when interest is compounded annually is:

4306

4396

4096

4809

Q10

Q10 What is the difference between compound interest and simple interest on Rs. 5,000 for 2 years at 4 per cent per annum according as the interest is compounded yearly?

Rs.2.04

Rs.3.06

Rs.4.80

Rs.8.30

1 2

Practice Compound Interest Questions & Answers

The more questions a candidate answers, the better their understanding of the Compound Interest concepts and their ability to answer quickly and accurately.

Importance: Medium

Difficulty level: 3 out of 5 (Normal)

Examination- SSC, Banking, GMAT, GRE, SAT, CAT, etc.

Parent section: Quantitative Aptitude

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