Compound Interest


  1. A sum of money put out at compound interest amounts in 2 years to Rs. 578.40 and in 3 years to Rs. 614.55. Find the rate of interest ?









  1. View Hint View Answer Discuss in Forum

    Clearly the difference between Rs. 578.40 and Rs.614.55 is the interest on Rs. 578.40 for 1 year.

    Correct Option: B

    Clearly the difference between Rs. 578.40 and Rs.614.55 is the interest on Rs. 578.40 for 1 year.
    ∴ Interest on Rs. 578.40 for 1 year = Rs. 614.55 - Rs. 578.40 = Rs. 36.15
    ∴ Interest on Rs.100 for 1 year = Rs. (36.15 x 100)/578.40
    = Rs. 3615/57840 x 100/1
    = Rs. 6.25
    = Rs. 61/4

    ∴ The required rate is .61/4 percent.


  1. The difference between the compound interest and the simple interest on a certain sum at 5% per annum for 2 years is Rs. 1.50. The sum is ?









  1. View Hint View Answer Discuss in Forum

    Let the sum be Rs. 100 then,
    S.I.= Rs.(100 x 5 x 2)/100 =Rs.10
    C.l.= Rs.[100 x (1 +5/100)2] =Rs.41/4

    ∴ difference between C.I. and S.I. = Rs. (41/4-10) = Re.0.25

    Correct Option: A

    Let the sum be Rs. 100 then,
    S.I.= Rs.(100 x 5 x 2)/100 =Rs.10
    C.l.= Rs.[100 x (1 +5/100)2] =Rs.41/4

    ∴ difference between C.I. and S.I. = Rs. (41/4-10) = Re.0.25

    ⇒ 0.25 : 1.50 : : 100 : P
    ∴ P = (1.50 x 100) / 0.25 = Rs. 600



  1. The value of a machine depreciates every year at the rate of 10% on its value at the beginning of that years. If the present value of the machine is Rs. 729. Its worth 3 years ago was ?









  1. View Hint View Answer Discuss in Forum

    ∵ P (1 - 10/100)3 = 729
    ∴ P = Rs.(729 x 10 x 10 x 10)/(9 x 9 x 9)

    Correct Option: C

    ∵ P (1 - 10/100)3 = 729
    ∴ P = Rs.(729 x 10 x 10 x 10)/(9 x 9 x 9) = Rs. 1000


  1. A tree increases annually by 1/8 th of its height. By how much will it increase after 2 years, if it stands today 64 cm high ?









  1. View Hint View Answer Discuss in Forum

    Increase% = (1/8) x 100% = 12.5%
    Height after 2 years =64 x {1 +25/(2 x 100)}2

    Correct Option: D

    Increase% = (1/8) x 100% = 12.5%
    Height after 2 years =64 x {1 +25/(2 x 100)}2
    = 64 x 9/8 x 9/8
    = 81 cm



  1. A loan was repaid in two annual instalments of Rs. 121 each. if the rate of interest be 10% per annum. compounded annually, the sum borrowed was ?









  1. View Hint View Answer Discuss in Forum

    Principal = (P.W. of Rs. 121 due 1 year later) + (P.W. of Rs. 121 due 2 years later)
    = Rs. [ 121 /(1 + 10/100) + (121 / (1 + 10/100)2]

    Correct Option: B

    Principal = (P.W. of Rs. 121 due 1 year later) + (P.W. of Rs. 121 due 2 years later)
    = Rs. [ 121 /(1 + 10/100) + (121 / (1 + 10/100)2]
    = Rs. 210