What is the difference between compound and simple interest on Rs. 25,000 for 2 years at 15% per annum?
Solution
For 2 years, CI − SI = P(R/100)² = 25000 × (15/100)² = 562.5.
Answer: (C) Rs. 562.50
Quantitative Aptitude · Arithmetic
Simple and Compound Interest: MAH CET, NMAT and SNAP practice questions
20 questions in the pattern of MAH MBA CET, NMAT and SNAP. Each question is marked with the exams it suits. Answer it, then open the step-by-step solution.
Exam:
In how many years will Rs. 15,000 earn Rs. 9000 as simple interest at 10% per annum?
Solution
T = SI × 100/(P × R) = 9000 × 100/(15000 × 10) = 6 years.
Answer: (C) 6 years
What is the difference between compound and simple interest on Rs. 10,000 for 3 years at 10% per annum?
Solution
For 3 years, CI − SI = P(R/100)²(3 + R/100) = 10000 × (10/100)² × (3.1) = 310.
Answer: (B) Rs. 310
A sum becomes three times itself in 10 years at simple interest. In how many years will it become 7 times itself?
Solution
Interest equal to 2 × P takes 10 years, so the rate = 20% per annum.
For 6 × P: T = 6 × 100/20 = 30 years.
Answer: (B) 30 years
Find the amount on Rs. 8000 after 2 years if the rate of compound interest is 10% for the first year and 20% for the second year.
Solution
Amount = 8000 × 1.1 × 1.2 = 10,560.
Answer: (D) Rs. 10,560
What amount will Rs. 15,625 become in 3 years at 8% per annum compound interest?
Solution
Amount = 15625 × (1.08)^3 = 19,683.
Answer: (D) Rs. 19,683
A sum at compound interest amounts to Rs. 6250 in 2 years and Rs. 7812.50 in 3 years. What is the rate of interest?
Solution
The third year's interest = 7812.5 − 6250 = 1562.5, earned on 6250.
Rate = 1562.5/6250 × 100 = 25%.
Answer: (D) 25%
A sum at compound interest amounts to Rs. 12,100 in 2 years and Rs. 13,310 in 3 years. What is the rate of interest?
Solution
The third year's interest = 13,310 − 12,100 = 1210, earned on 12,100.
Rate = 1210/12,100 × 100 = 10%.
Answer: (A) 10%
Rs. 12,000 is lent in two parts, one at 6% and the other at 9% simple interest. The total yearly interest is Rs. 936. How much was lent at 6%?
Solution
Let x be lent at 6%: 6x/100 + 9(12000 − x)/100 = 936.
1080 − 3/100x = 936, so x = 4800.
Answer: (B) Rs. 4800
Find the compound interest on Rs. 10,000 for 1 year at 10% per annum, compounded half-yearly.
Solution
Rate per period = 5%; number of periods = 2.
Amount = 10000 × (1 + 5/100)^2 = 11,025; CI = 1025.
Answer: (B) Rs. 1025
A loan is repaid in two equal annual instalments of Rs. 7260 each, with compound interest at 10% per annum. What was the loan amount?
Solution
Each instalment's present value: 7260/1.1 + 7260/1.1².
Loan = 6600 + 6000 = 12,600.
Answer: (D) Rs. 12,600
What is the difference between compound and simple interest on Rs. 1000 for 3 years at 10% per annum?
Solution
For 3 years, CI − SI = P(R/100)²(3 + R/100) = 1000 × (10/100)² × (3.1) = 31.
Answer: (B) Rs. 31
A sum of money doubles itself in 5 years at compound interest. In how many years will it become 16 times itself?
Solution
16 = 2^4. Each doubling takes 5 years.
Time = 4 × 5 = 20 years.
Answer: (B) 20 years
The difference between compound and simple interest on a sum for 2 years at 10% per annum is Rs. 250. What is the sum?
Solution
CI − SI = P(R/100)², so P = 250 ÷ (10/100)² = 25000.
Answer: (D) Rs. 25,000
The simple interest on a sum is 9/25 of the sum, and the number of years equals the rate of interest. What is the rate?
Solution
SI/P = R × T/100 with T = R, so R²/100 = 9/25.
R² = 36, so R = 6%.
Answer: (D) 6%
A sum of money amounts to Rs. 4800 in 2 years and to Rs. 5600 in 4 years at simple interest. What is the sum?
Solution
Interest for 2 years = 5600 − 4800 = 800, so one year's interest = 400.
Sum = 4800 − 2 × 400 = 4000.
Answer: (D) Rs. 4000
A sum of money amounts to Rs. 5280 in 4 years and to Rs. 6240 in 7 years at simple interest. What is the sum?
Solution
Interest for 3 years = 6240 − 5280 = 960, so one year's interest = 320.
Sum = 5280 − 4 × 320 = 4000.
Answer: (B) Rs. 4000
A sum becomes double itself in 4 years at simple interest. In how many years will it become 5 times itself?
Solution
Interest equal to 1 × P takes 4 years, so the rate = 25% per annum.
For 4 × P: T = 4 × 100/25 = 16 years.
Answer: (C) 16 years
What is the simple interest on Rs. 15,000 at 6% per annum for 5 years?
Solution
SI = P × R × T/100 = 15000 × 6 × 5/100 = 4500.
Answer: (B) Rs. 4500
The simple interest on a sum for 2 years at 20% per annum is Rs. 1000. What will be the compound interest on the same sum, at the same rate and time?
Solution
Sum = 1000 × 100/(20 × 2) = 2500.
CI = 2500 × ((1 + 20/100)² − 1) = 1100.
Answer: (A) Rs. 1100
These are original practice questions written by Target Campus in the pattern and difficulty of MAH MBA CET, NMAT, SNAP and other MBA entrance tests. They are not previous-year papers.
Preparing for MAH CET, NMAT, SNAP or CAT? Courses, live classes and mocks by Dr. Kiran Derle at Target Campus.
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