Learn and practice the chapter "Compound Interest" with these solved Aptitude Questions and Answers. Each question in the topic is accompanied by a clear and easy explanation, diagrams, formulae, shortcuts and tricks that help in understanding the concept.

Use of Compound Interest Questions

The questions and examples given in this section will be useful to all the freshers, college students and engineering students preparing for placement tests or any competitive exam like MBA, CAT, MAT, SNAP, MHCET, XAT, NMAT, GATE, Bank exams - IBPS, SBI, RBI, RRB, SSB, SSC, UPSC etc. Practice with this online test to crack your placements and entrance tests!

1. Sum: 6400
Time period: 6 months
Rate of interest: 25% compounded quarterly.
Find the interest earned.

3. Radhika wants to invest some amount for 3 years in a new scheme which says that the compound rate of interest for three years will be 5%, 12% and 8% respectively. How much investment will yield her Rs 6350.40 at the end of the investment period?

a. Rs. 5000
b. Rs. 5800
c. Rs. 6000
d. Rs. 6500

Answer: a. Rs. 5000

Explanation:

Total Amount = Rs. 6350.40 = P

1 +

R

n

100

Rate of interest, R_{1} = 5% for 1^{st} year; Time, n_{1} = 1 year (1^{st} year)
R_{2} = 12% for 2^{nd} year; n_{2} = 1 year (2^{nd} year)
R_{3} = 8% for 3^{rd} year; n_{3} = 1 year (3^{rd} year)

∴ 6350.40 = P

1 +

5

1

1 +

12

1

1 +

8

1

100

100

100

∴ 6350.40 = P

105

112

108

100

100

100

∴ P =

6350.40 x 100 x 100 x 100

105 x 112 x 108

∴ P = Rs. 5000

4. Rohit says that, an amount became 4 times in 6 years. His friend wanted to know, how many years will it take for the amount to become 64 times, provided the rate of interest remains same?

a. 12 years
b. 16 years
c. 18 years
d. 24 years

Answer: c. 18 years

Explanation:

Initial Amount = P.
P becomes 4 times in 6 years ∴ P → 4P in 6 years
∴ 4P → 4 x (4P) = 16P in next 6 years.
Continuing this, 16P → 4 x (16P) = 64P in next 6 years.
So total time to get to 64 times i.e. 64P = 6+6+6 = 18 years.

5. At the end of 3 years, the difference between the compound interest and simple interest comes to be Rs 320. The rate of interest is 25%. Find the principal amount.

a. Rs. 1525.50
b. Rs. 1545.78
c. Rs. 1550
d. Rs. 1575.38

Answer: d. Rs. 1575.38

Explanation:

Principal = P

Compound Interest = Total Amount - Principal = P

1 +

R

n

- P

100

Simple Interest =

PRT

100

R= 25% per annum; T and n = 3 years
Compound Interest - Simple Interest = Rs. 320