Simple Interest and Compound Interest Practice Questions

SIMPLE INTEREST AND COMPOUND INTEREST PRACTICE QUESTIONS FOR BANK EXAMS

Qs.1.A sum of money amount to Rs.944 in 3 years at simple interest. If the rate of interest be raised by 25% the sum amounts to 980 during the same period. Find the sum and rate of interest. a) b) c) d) e)

Rs.900 , 7% Rs.800, 6% Rs.700, 5% Rs.750, 8% Rs.868, 6.3%

Ans:b Let P be the principal, 𝑃×3×𝑅 100 3𝑃𝑅 𝑃 = 944 − … … . . (1) 100 944 − 𝑃 =

p s

A k n 125

If the rate is increased by 25% new Rate=

a b

From (1)&(2)

w

100

i. n ri e

5

𝑅= 𝑅 4

5 𝑃×3× 𝑅 4 980 − 𝑃 = 100 3𝑃𝑅 𝑃 = 980 − … … … … (2) 80

. w w

980 −

3𝑃𝑅 80

= 944 −

36 =

3𝑃𝑅 100

15𝑃𝑅 − 12𝑃𝑅 400

3𝑃𝑅 = 400 × 36 … … … . (3) Substitute (3) in (1) 𝑃 = 944 −

400 × 36 = 944 − 144 = 800 100

3 × 800 × 𝑅 = 400 × 36 𝑅 = 6%

For more bank exam preparation materials visit www.bankAspire.in


Shortcut: 25% of interest= Rs.980-Rs.944=Rs.36 100  100 % of interest= × 36 = 𝑅𝑠. 144 25 Hence the interest of 3 years =Rs.144 Then principal=Rs.944-Rs.144=Rs.800 3 Qs.2.A man deposits Rs.5600 in a bank at 3 % annual interest. After 6 4

months he withdraws Rs.3200 together with interest and after six months he withdraws the remaining money. How much does he get as interest? a) b) c) d) e)

Rs.150 Rs.105 Rs.45 Rs.65 None of these

p s

A k n

Ans:a

a b

S.I for Rs.5600 for 6 months =

. w w

1 2

3 4

5600× ×3 100

i. n ri e

= 𝑅𝑠. 105

Amount remaining after 6 months=Rs.5600-Rs.3200=Rs.2400 Interest for next 6 months on the amount Rs2400=

w

1 2

2400× ×3 100

3 4

= 𝑅𝑠. 45

Total Interest earned =Rs.105+Rs.45=Rs.150

Qs.3.A certain sum given on simple interest became double in 20 years. In how ,many years will it be four times? a) b) c) d) e)

40 25 60 80 None of these

Ans:c Let P be the principal



𝑃 × 𝑅 × 20 100

2𝑃 = 𝑃 +

 2=1+

20𝑅 100

 𝑅=5

To become 4P,Let T be the time period in years 4𝑃 = 𝑃 +

𝑃×𝑅×𝑇 100

4𝑃 = 𝑃 +

𝑃×5×𝑇 100

4=1+

5×𝑇 100

p s

𝑇 = 60

i. n ri e

A k n

Shortcut:

If principle doubles in T years at R % interest, then T=100/R 100 20 = , => R=5 𝑅 If principle becomes four times in T years at R%, then T=(3*100)/R 3 × 100 𝑇= = 60 5

a b

w

. w w

Qs.4.A man derives his income from an investment of Rs.2000 at a certain rate of interest and Rs.1600 at 2% higher. The whole interest in 3 years is Rs.960.Find the rate of interest a) b) c) d) e)

8.5% 8.33% 8% 8.66% None of these

Ans:C



Interest on (Rs.2000+Rs.1600) with the rate of interest r and interest on Rs.1600 with 2% for 3 yrs =Rs.960 Hence,960 =

3600×𝑟×3 100

+

1600×2×3 100

 r=8 Qs.5.A sum of Rs.1550 was lent partly at 5% and partly at 8% simple interest. The total interest received after 3 years was Rs.300. The ratio of money lent at 5% and 8% is a) b) c) d) e)

5:8 8:5 31:6 16:15 None of these

p s

i. n ri e

A k n

Ans:d

1550×3×5

Interest on Rs.1550 at 5% for 3 yrs=

a b

100

= 232.50

Remaining interest =300-232.50=Rs.67.50 is equal to (8%-5%) of interest  67.50 =  P=750

𝑃×3×3 100

. w w

Here P is the part of the principal lent at 8%

w

Hence rs.750 is being lent at 8% and remaining (1550-750)=Rs=800 at 5% Required ratio= 800:750= 16:15 Qs.6.A sum of Rs.2600 lent in two parts so that the interest on the first part for a period of 3 years at 5% is equal to second part for 6years at 4% .The second part is equal to a) b) c) d) e)


Ans:c For more bank exam preparation materials visit www.bankAspire.in


Let X be the first part and second part be Y,the 𝑋×3×5 𝑌×6×4 = 100 100 

𝑋 𝑌

=

8 5

𝑋=

8 × 2600 = 1600 8+5

𝑌 = 2600 − 1600 = 1000

i. n ri e

Qs.7.The S.I on certain sum of money for 3 years at 4% is Rs.303.60.Find the C.I on the same sum for same period at same rate. a) b) c) d) e)

Rs.2530 Rs.350 Rs.315.90 Rs.350.90 Rs.432

p s

Ans:c S.I=3030.60,R=4%,T=3 303.60×100

P=

4

w

a b

. w w

× 3 = 𝑅𝑠. 2530

A k n

𝐶. 𝐼 = 𝑃[(1 +

𝑅 𝑡 ) − 1)] 100

4 3 = 2530 [(1 + ) − 1] 100 26 3 = 2530 [( ) − 1] = 𝑅𝑠. 315.90 25

Qs.8.A sum of money put out at C.I amount to Rs.4050 in 1 year and in 3 years to Rs.4723.92.Find the the original sum and rate of interest. a) Rs.3450 b) Rs.3700



c) Rs.3750 d) Rs 4530 e) None of these

Ans:c 4723.92 = 𝑃 [(1 + 4050 = [(1 +

𝑅

3

) ]………….(1) 100

1

𝑅

) ]…………………..(2) 100

Divide (1) by (2) 4723.92 𝑅 = (1 + ) 4050 100

2

p s

472392 𝑅 2 = (1 + ) 405000 100

i. n ri e

A k n

2 × 4 × 9 × 9 × 27 × 27 𝑅 2 = (1 + ) 2 × 25 × 81 × 10 × 10 100

a b

2 × 9 × 27 𝑅 = (1 + ) 5 × 9 × 10 100

𝑅 = 8%

w

. w w

27 𝑅 = (1 + ) 25 100

Putting the value of R in eqn (2) we get 4050 = 𝑃 (1 +

8 ) 100

𝑃 = 𝑅𝑠. 3750 Qs.9.Find the C.I of on Rs 10000 in 9 months at 4% per annum interest payable quarterly. a) Rs.303.01 b) Rs.301.03 c) Rs.300.13 For more bank exam preparation materials visit www.bankAspire.in


d) Rs.374.33 e) None of these

Ans:a P=10000 T=9months=3/4 yr=3 quarters R=4/4=1% quarterly 𝐶. 𝐼 = 10000 [(1 +

1 3 ) − 1)] = 𝑅𝑠. 303.01 100

i. n ri e

Qs.10.Some money was lent on 4% C.I. If the difference in interest of second and first year is Rs.88,find out the sum. a) b) c) d) e)

p s


Ans:d

A k n

a b

. w w

For finding the answer via direct method, calculate first year interest and second year interest using the C.I formula. Then equate their difference to 88,solve for principal P

w

Shortcut:

𝑃×4×1

𝑃

100 𝑃

25

First year interest= = 100 25 Second year interest= Interest on sum+ interest on interest 𝑃×4×1 𝑃 4 𝑃 𝑃 = + × )= + 2 Rs.88=

𝑃

25

+

𝑃 252

−

𝑃 25

=

100

25

25

252

𝑃 = 88 × 625 = 𝑅𝑠. 55000 Qs.11.The compound interest on a sum of money for 2 years is Rs.410 and the simple interest on the same sum for same period at same rate is Rs.400. Find the rate of interest. a) 4% For more bank exam preparation materials visit www.bankAspire.in


b) c) d) e)

3% 5% 6% None of these

Ans:c 𝐶. 𝐼 = 𝑃 [(1 + 𝑅

410 = 𝑃 [(1 +

100

) 2 − 1)]…………..(1)

𝑆. 𝐼 = 400 =

1 𝑡 ) − 1)] 100

𝑃𝑅×2 100

Solving (1)&(2) you will get R=5%

𝑃𝑅𝑇 100

p s

……………(2)

A k n

Shortcut:

i. n ri e

Difference between simple interest and compound interest for a period of 2 years on same sum at same rate is given by the formula 𝑅 2 𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 = 𝑃 × ( ) 100

. w w

 410 − 400 = 𝑃 × (  10 =

𝑃𝑅 2

 400 =

𝑅

2

) 100

………….(1)

w

1002

a b

𝑆. 𝐼 =

2𝑃𝑅

100 400×100

𝑃𝑅𝑇 100

200×100

𝑃= = 2𝑅 𝑅 Substituting value of P in (1) 𝑃𝑅2 10 = 1002 200 × 100 2 𝑅 𝑅 10 = = 2𝑅 1002



10 = 5% 2

𝑅=

Qs.12.David invested certain amount in 3 different schemes A,B and C with the rate of interest 10% p.a,12% p.a and 15% p.a(simple interest) respectively. If total accrued in one year was Rs.3200 and the amount invested in C was 150% of the amount invested in A and 240% of the amount invested in scheme B, what was the amount invested in scheme B? a) b) c) d) e)

Rs.5000 Rs.6500 Rs.8000 Cannot be determined None of these

p s

i. n ri e

A k n

Ans:a

Let x,y and z be the amounts invested in A,B and C respectively. Then

a b

𝑥 × 10 × 1 𝑦 × 12 × 1 𝑧 × 15 × 1 + + = 3200 100 100 100

. w w

 10𝑥 + 12𝑦 + 15𝑧 = 320000…..(1) Now,z is 240% of y=

w

And 𝑧 =

150 100

240 100

𝑦=

12 5

𝑦

𝑧=

12 5

𝑦……..(2)

𝑥 3

2

24

2

3

15

 𝑧 = 𝑥, 𝑥 = 𝑧 =

8

𝑦 = 𝑦…….(3) 5

From (1),(2) and (3) 16𝑦 + 12𝑦 + 36𝑦 = 32000 𝑦 = 5000 Sum invested in B =Rs.5000



Qs.13. A sum of money amounts to Rs.6690 after 3years and to Rs.10035 after 6 years on C.I. Find the sum a) b) c) d) e)


Ans:c 6690 = 𝑃 (1 +

𝑅

3

) …….(1) 100

10035 = 𝑃 (1 +

𝑅 100

6

) …….(2)

p s

(2)/(1)

i. n ri e

A k n

10035 𝑅 3 = (1 + ) 6690 100

a b

Substituting this in (1), we get 10035 6690 6690 𝑃 = 6690 × = 4460 10035

. w w

6690 = 𝑃

w

Qs.14.A sum of money doubles itself at C.I in 15 years. In how many years will it become 8 times.? a) b) c) d) e)

30 years 25 years 35 years 45 years 60 years

Ans:d 𝑅 15 2𝑃 = 𝑃 (1 + ) 100



 2 = (1 +

15

𝑅

) 100

Let in n years sum becomes 8 times, then 𝑅 𝑛 8𝑃 = 𝑃 (1 + ) 100  8 = (1 +

) 100

 23 = (1 +  [(1 +

𝑅

100

𝑛

) 100

15

𝑅

𝑛

𝑅

)

]3=(1

+

𝑅 100

𝑛

)

 15 × 3 = 𝑛  𝑛 = 45

p s

Thus required time =45 years

A k n

i. n ri e

Qs.15.If the C.I interest on a sum at 12.5% p.a. for 2 years is Rs.510.The S.I on the same sum at same rate for the same period is: a) b) c) d) e)


Ans:d 𝐶. 𝐼 = 𝑃 [(1 +

w

. w w

a b

𝑅 𝑇 ) − 1)] 100

12.5 2 9 2 510 = 𝑃 [(1 + ) − 1)] = 𝑃 [( ) − 1] = 510 100 8 𝑃 = 1920 𝑃𝑅𝑇 1920 × 12.5 × 2 𝑆. 𝐼 = = = 𝑅𝑠. 480 100 100


Simple Interest and Compound Interest Practice Questions

Recommend Documents