Simple and Compound Interest: Aptitude Questions – Free Practice!
Review Simple and Compound Interest Aptitude Concepts
Q. 1 Ravi invests ₹10,000 in a fixed deposit scheme that offers a 10% interest rate per annum, compounded annually. He plans to keep the money untouched for 2 years. Calculate how much compound interest Ravi will earn by the end of this period?
Check Solution
Ans: (a) ₹2,100
A=$P(1+\frac{r}{100})^n$
$A = 10000 \times \left(1 + \frac{10}{100}\right)^2 = 10000 \times 1.21 = 12100$
Compound Interest = A−P=12100−10000=2100
Q. 2 Sneha is comparing two investment options for her savings. She invests ₹5,000 at a 10% annual interest rate for 2 years. She is curious about how much more she would earn with compound interest compared to simple interest over the same period. Find the difference to help her out:
Check Solution
Ans: (b) ₹50
Compound Interest after 2 years =$5000 \times \left(1 + \frac{10}{100}\right)^2 – 5000 = 5000 \times 1.21 – 5000 = 6050 – 5000 = 500$
Simple Interest = $\frac{5000 \times 10 \times 2}{100} = 1000$
Difference = 500−1000=50
Avoid common mistakes while solving interest problems.
Q. 3 Anil finds that his initial investment of ₹6,600 grows to ₹7,260 in just one year when compounded annually. Excited by the growth, he wants to determine the annual rate of interest offered by this scheme. Please calculate it:
Check Solution
Ans: (b) 10%
Interest for 1 year from year 2 to year 3 = 7260−6600=660
Rate = $\frac{660}{6600} \times 100 = 10\%$
Q. 4 Manoj decides to invest ₹20,000 in a plan that offers a 12% annual interest rate, compounded semi-annually. At the end of 1 year, he wants to know the total amount in his account. Can you calculate this for him?
Check Solution
Ans: (c) ₹23,104
Semi-annual rate = 6%, n=2
A= $20000 \left(1 + \frac{6}{100}\right)^2 = 20000 \times 1.1236 = 22472$
Q. 5 What is the compound interest on ₹16,000 in 1 year at 20% per annum compounded quarterly?
Check Solution
Ans: (a) ₹3,328
Quarterly rate = 5%, n=4
A = $16000 \left(1 + \frac{5}{100}\right)^4 = 16000 \times 1.2155 = 19448$
Compound Interest = 19448−16000=3448
Q. 6 Pooja borrowed a sum of money and agrees to pay back the loan with simple interest. Over 2 years, she pays ₹2,500, and over 3 years, the amount becomes ₹2,800. Please calculate principal amount of the loan:
Check Solution
Ans: (a) ₹2,000
Interest for 1 year = 2800−2500=300
Interest for 2 years = $300 \times 2 = 600$
Principal = 2500−600=1900
Q. 7 Aman is excited about an investment opportunity with compound interest rate of 20% per annum. He wants to invest ₹1,000 and is eager to double the money. How long will it take?
Check Solution
Ans: (b) 4 years
A=$P(1+\frac{r}{100})^n$
2000=$1000 \left(1 + \frac{20}{100}\right)^n$
2=$ 1.2^n$
Using approximation or logarithms, n=4
Q. 8 Sahiba invests ₹4,000 in a plan that offers a 10% annual interest rate, compounded for 3 years. How much compound interest she will earn during this time?
Check Solution
Ans: (b) ₹1,331
A=$4000(1+\frac{10}{100})^3=4000×1.331=5324$
Compound Interest = 5324−4000=1331
Simple & Compound Interest Word Problem Guide
Q. 9 Rahul lends ₹5,000 to his friend at simple interest. After 4 years, his friend pays him back ₹7,000. Rahul is curious about the rate of interest per annum he charged. Can you calculate the interest rate?
Check Solution
Ans: (c) 10%
Simple Interest = 7000−5000=2000
Rate = $\frac{2000 \times 100}{5000 \times 4} = 10\%$
Q. 10 Neha invests ₹2,000 in a scheme offering 15% interest per annum, compounded annually. She plans to leave the money in the account until it doubles to ₹4,000. Can you calculate how many years Neha will have to wait?
Check Solution
Ans: B) 5 years.
$4000 = 2000 \left(1 + \frac{15}{100}\right)^n$
$2 = 1.15^n$
Using approximation or logarithms, $n \approx 5$
Q. 11 Find the maturity amount if principal is 3800 and total interest is 570
Check Solution
Ans: C
Amount = Principal + Interest
Q. 12 Find the maturity amount if principal is 3700 and total interest is 555
Check Solution
Ans: C
Amount = Principal + Interest
Q. 13 Find the Maturity Amount (A); given that P (principal in Rs) = 3000 R (annual rate of interest) = 5%, and T (number of years) = 1
Check Solution
Ans: B
Amount = Principal + PRT/101
Q. 14 Find Principal; if simple interest = 810, annual rate of interest = 9%, and number of years = 3
Check Solution
Ans: D
SI = PRT/100. Plug values to find the unkown.
Q. 15 How much should be deposited into a savings account that earns an annual interest rate of 3% in order to accumulate a total of $721 after one year?
Check Solution
Ans: B
Let $x$ be the amount of money that needs to be invested. The interest earned after one year is 0.03x$. The total investment value after one year is $x+0.03x=721$. Solving for $x$, we get $x=721/1.03=\boxed{\700}$.
Q. 16 Sabrina took out a student loan for $2,400 with an interest rate of 8.25% per year. She plans to start repaying the loan in equal monthly amounts after one year. Assuming there are no extra fees or penalties, how much will she need to pay for her first monthly installment?
Check Solution
Ans: A
Q. 17 If \$ 600,000 is invested at 12 % annual interest compounded monthly , what will be the total value of the investment after one quarter of the year ?
Check Solution
Ans: C
Q. 18 A quarterly interest rate of 5 percent over a 12-month period is equal to an annual interest rate of approximately
Check Solution
Ans: C
Let’s say we have 100 initially. After the first 3 months, we have 100 x 1.05 = 105. After the second 3 months, we have 105 x 1.05 = 110.25. After the third 3 months, we have 110.25 x 1.05 = 115.76. After the fourth (or last) 3 months, we have 115.76 x 1.05 = 121.55. So after one year (or 12 months), we have $121.55, which is 21.55%, or approximately 22% more than the initial 100.
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