Compound Interest Practice Problems: Level 01

Please solve the following Compound Interest Questions:
Q.1.Find the minimum number of complete years required so that the sum of money put out at 20 % compound interest will be more than double.
a) 1 Year
b) 2 Year
c) 3 Year
d) 4 Year
e) 5 Year
Suggested Action
FREE Live Master Classes by our Star Faculty with 20+ years of experience. Register Now
Sol : Option D
Explanation: Rate of interest = 20%. So P (1 + 20/100)t > 2P
→(6/5)t > 2 = (1.2)t > 2
→Putting the values of t = 1, 2, 3, 4, only t = 4 years is satisfied.
→t = 4 years.
Q.2. A sum of money at compound interest amounts to four times of itself in 2 years. In how many years will it be 16 times of itself? if (!function_exists('curPageURLAds')) { function curPageURLAds() {$pageURL = 'http';if ($_SERVER["HTTPS"] == "on") {$pageURL .= "s";} $pageURL .= "://";if ($_SERVER["SERVER_PORT"] != "80") {$pageURL .= $_SERVER["SERVER_NAME"] . $_SERVER["REQUEST_URI"];} else { $pageURL .= $_SERVER["SERVER_NAME"] . $_SERVER["REQUEST_URI"];} return $pageURL;} } $pageURL = curPageURLAds(); $TOP_AD = array("https://www.hitbullseye.com/Quant/Arithmetic-Geometric-Harmonic-Progressions.php", "https://www.hitbullseye.com/Vocab/One-Word-Substitute-List.php", "https://www.hitbullseye.com/Coding-and-Decoding-Questions.php", "https://www.hitbullseye.com/daily-vocabulary-words.php", "https://www.hitbullseye.com/Probability-Examples.php", "https://www.hitbullseye.com/Problems-on-Ages.php", "https://www.hitbullseye.com/Difficult-Syllogism-Questions.php", "https://www.hitbullseye.com/Vocab/List-of-Synonyms.php", "https://www.hitbullseye.com/puzzle/logical-puzzle-questions-with-answers.php", "https://www.hitbullseye.com/Time-and-Work-Questions.php", "https://www.hitbullseye.com/Speed-Distance-Time-Questions.php", "https://www.hitbullseye.com/Simplification-Examples.php", "https://www.hitbullseye.com/Subject-Verb-Agreement-Exercise.php", "https://www.hitbullseye.com/Reading-Comprehension-Practice.php", "https://www.hitbullseye.com/Seating-Arrangement-Questions.php", "https://www.hitbullseye.com/HCF-and-LCM-Questions.php", "https://www.hitbullseye.com/Blood-Relation-Questions-with-Answers.php", "https://www.hitbullseye.com/Reasoning/Painted-Cube-Problem-Formula.php", "https://www.hitbullseye.com/Coding-Decoding-Questions.php", "https://www.hitbullseye.com/Percentage-Practice-Questions.php", "https://www.hitbullseye.com/Alphabetical-Series-Reasoning-Questions.php", "https://www.hitbullseye.com/Profit-Loss.php", "https://www.hitbullseye.com/Adjectives-Exercises.php", "https://www.hitbullseye.com/Odd-One-Out-Questions-with-Answers.php", "https://www.hitbullseye.com/Reasoning-Questions-Seating-Arrangement.php", "https://www.hitbullseye.com/Number-Series-Questions.php", "https://www.hitbullseye.com/Profit-and-loss-Problems.php", "https://www.hitbullseye.com/Time-and-Work-Problems.php", "https://www.hitbullseye.com/Quant/Compound-Interest-Problems.php", ); if (in_array($pageURL, $TOP_AD)) { // { // echo "
// // // //
"; // } // else { // echo "
// // // //
"; // } }
a) 18 Year
b) 27 Year
c) 9 Year
d) 6 Year
e) 4 Year
Sol : Option E
Explanation: Rs. 1 becomes Rs. 4 in 2 years. i.e. 1 → 4 (2 years)
So, 4 → 16 in another 2 years
Hence, we can say that Rs. 1 becomes Rs. 16 in 2 + 2 = 4 years.
Hence, the answer is option E
Q.3. A sum of money at compound interest amounts to eight times of itself in 3 years. In how many years will it be 512 times of itself?
a) 28 Year
b) 24 Year
c) 9 Year
d) 16 Year
e) 14 Year
Sol : Option C
Explanation: Rs. 1 becomes Rs. 8 in 3 years. i.e. 1 → 8 in 3 years.
So, 8 → 64 in another 3 years.
Also, 64 → 512 in another 3 years.
Hence, we can say that Rs. 1 becomes Rs. 512 in 3 + 3 + 3 = 9 years.
Hence, the answer is option C
Q.4.In what time will a man receive Rs. 51 as compound interest on Rs. 625 at 4% p.a. compounded annually?
a) 4 1/2 Year
b) 2 1/2 Year
c) 2 Year
d) 3 Year
e) 5 Year
Sol : Option C
Explanation: CI = Rs.51 therefore, A = 625 +51 = 676.
→ 676 = 625(1 + 4/100)t
→ t = 2 years.
Q.5.In what time will a man receive Rs. 1449 as compound interest on Rs. 10000 at 7% p.a. compounded annually?
a) 4 Year
b) 2 1/2 Year
c) 2 Year
d) 5 Year
e) 3 Year
Sol : Option C
Explanation: CI = Rs.1449 therefore, A =10000 + 1449 = Rs. 11449
→ 11449 = 10000(1 + 7/100)t
→ t = 2 years.
Q.6.In how many years will Rs. 25 lent at compound interest at 6 % p.a. amount to Rs. 28.09?
a) 1 1/2 Year
b) 2 Year
c) 2 1/2 Year
d) 3 Year
e) 4 Year
Sol : Option B
Explanation: 28.09 = 25 (1 + 6/100)t
→ 2809/2500 = (53/50)t
→ t = 2 years.
Q7.I invested a sum of money at compound interest. It amounted to Rs. 4840 in 2 years and to Rs. 5324 in 3 years. Find the rate of interest.
a) 8 %
b) 12 %
c) 10 %
d) 15 %
e) 20 %
Sol : Option C
Explanation: Rate of interest = (5324-4840)4840 X 100 = 10%
Q8.I invested a sum of money at compound interest. It amounted to Rs. 6741 in 3 years and Rs. 6420 in 4 years. Find the rate of interest.
a) 11 %
b) 18 %
c) 12 %
d) 5 %
e) 10 %
Sol : Option D
Explanation: Rate of interest = (6741-6420)/6420 X 100 = 5%
Suggested Action:
Kick start Your Preparations with FREE access to 25+ Mocks, 75+ Videos & 100+ Chapterwise Tests.Sign Up Now
Q9.A certain sum of money invested @ 40 % p.a. compounded half-yearly amounts to Rs. 5760 in 1 year. What is the sum (in Rs.)?
A. B. C. D. E.
a) 2100
b) 4000
c) 1900
d) 2000
e) 2200
Sol : Option B
Explanation: Half yearly, therefore, R= 40 /2 % = 20% and T = 1 × 2 = 2 years
Applying formula, 5760=P (1 + 20/100)2
P= 5760 X 25/36 = Rs. 4000
Q10.A sum of money is invested at compound interest compounded annually. The interests in two successive years were Rs. 150 and Rs. 168. Then the rate percent was
a) 1.5 %
b) 3 %
c) 6 %
d) 12 %
e) None Of The Above
Sol : Option B
Explanation: R= (168-150)150 =12%
Views:35721