Aptitude Questions on Simple and Compound Interest
Review Simple and Compound Interest 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?
a) ₹2,100
b) ₹2,000
c) ₹2,210
d) ₹2,310
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:
a) ₹25
b) ₹50
c) ₹75
d) ₹100
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
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:
a) 5%
b) 10%
c) 15%
d) 20%
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?
a) ₹22,500
b) ₹22,880
c) ₹23,104
d) ₹24,000
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?
a) ₹3,328
b) ₹3,264
c) ₹3,200
d) ₹3,360
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:
a) ₹2,000
b) ₹2,100
c) ₹2,200
d) ₹2,300
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?
a) 3 years
b) 4 years
c) 5 years
d) 6 years
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?
a) ₹1,200
b) ₹1,331
c) ₹1,482
d) ₹1,552
Check Solution
Ans: (b) ₹1,331
A=$4000(1+\frac{10}{100})^3=4000×1.331=5324$
Compound Interest = 5324−4000=1331
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?
a) 8%
b) 9%
c) 10%
d) 12%
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?
a) 4 years
b) 5 years
c) 6 years
d) 7 years
Check Solution
Ans: B) 50 km/hr.
$4000 = 2000 \left(1 + \frac{15}{100}\right)^n$
$2 = 1.15^n$
Using approximation or logarithms, $n \approx 5$
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