Compound Interest
- What will be the present worth of ₹ 169 due in 2 yr at 4 % pa compound interest ?
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Given R = 4 %, n = 2 yr and A = ₹ 169.
P = ?
Amount = P(1 + R/100)n
⇒ 169 = P(1 + 4/100 )2Correct Option: A
Given R = 4 %, n = 2 yr and A = ₹ 169.
P = ?
Amount = P(1 + R/100)n
⇒ 169 = P(1 + 4/100 )2
⇒ 169 = P(26/25)2
⇒ P = 169 x (25 x 25)/(26 x 26)
∴ P = 105625 / 676
= ₹ 156.25
- Find the compound interest on ₹ 31250 at 16 % pa compounded quaterly for 9 months.
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Given, P = ₹ 31250,
n = 9 Month = 3 quarters and
R = 16% pa = 4% per quarter
According to the formula
Amount = P(1 + R/100 )n
= 31250(1 + 4/100 )3Correct Option: B
Given, P = ₹ 31250,
n = 9 Month = 3 quarters and
R = 16% pa = 4% per quarter
According to the formula
Amount = P(1 + R/100 )n
= 31250(1 + 4/100 )3
= 31250 x (26/25) x (26/25) x (26/25)
= ₹ 35150
∴ CI = 35152 - 31250
= ₹ 3902
- A sum amounts to ₹ 2916 in 2 yr and ₹ 3149.28 in 3 yr at compound interest. The sum is ?
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Let required amount be ₹ P.
According to the question,
2916 = P (1 + R/100)2 ... (i)
and 3149.28 = P(1 + R/100)3 ... (ii)Correct Option: B
Let required amount be ₹ P.
According to the question,
2916 = P (1 + R/100)2 ... (i)
and 3149.28 = P(1 + R/100)3 ... (ii)
On dividing Eq. (ii) by Eq. (i), we get
1 + R/100 = 3149.28/2916
⇒ R/100 = (3149.28/2916) - 1
⇒ R = (233.28/2916) x 100 = 8%
From Eq. (i),
P = (2916 x 100 x 100)/(108 x 108)
= ₹ 2500
- Ram invests ₹ 5000 in a bond which gives interest at 4% per annum during the first year, 5% during the second year and 10% during the third year. How much does he get at the end of third year ?
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We can find required answer with the help of given formula ,
A = P 
1 + r1 
1 + r2 1 + r3 100 100 100
Here, P = ₹ 5000 , r17 = 4% , r2 = 5% , r3 = 10%A = 5000 1 + 4 1 + 5 1 + 10 100 100 100
Correct Option: C
We can find required answer with the help of given formula ,
A = P 1 + r1 1 + r2 1 + r3 100 100 100
Here, P = ₹ 5000 , r17 = 4% , r2 = 5% , r3 = 10%A = 5000 1 + 4 1 + 5 1 + 10 100 100 100 A = 5000 × 26 × 21 × 11 25 20 10
A = ₹ 6006.
- A sum of money was lent at 10% per annum, compounded annually, for 2 years. If the interest was compounded half-yearly, he would have received ₹ 220.25 more. Find the sum.
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Let the sum be ₹ P.
Here , R = 10% per annum , Time = 2 years
When compounded yearly,
amount = P 
1 + 10 
2 = 121 P 100 100
When compounded half-yearly,amount = P 1 + 5 4 = 194481 P 100 160000
So, Given difference = ₹ 220.25⇒ 194481 − 121 P = 220.25 160000 100 ⇒ 194481 − 193600 P = 220.25 160000
Correct Option: A
Let the sum be ₹ P.
Here , R = 10% per annum , Time = 2 years
When compounded yearly,
amount = P 1 + 10 2 = 121 P 100 100
When compounded half-yearly,amount = P 1 + 5 4 = 194481 P 100 160000
So, Given difference = ₹ 220.25⇒ 194481 − 121 P = 220.25 160000 100 ⇒ 194481 − 193600 P = 220.25 160000 ⇒ 881 P = 220.25 160000 ⇒ P = 160000 × 220.25 = ₹ 40,000. 881
