Compound Interest


  1. The simple interest for certain sum in 2 yr at 4% pa is ₹ 80. What will be the compound interest for the same sum, if conditions of rate and time period are same ?









  1. View Hint View Answer Discuss in Forum

    Given, n = 2 yr, R = 4% and SI = 80
    According to the formula,
    CI = SI(1 + 4/200)

    Correct Option: B

    Given, n = 2 yr, R = 4% and SI = 80
    According to the formula,
    CI = SI(1 + 4/200) = 80 x 51/50 = ₹ 81.60


  1. Income of Shantanu was ₹ 4000. In the first 2 yr. his income decreased by 10% and 5% respectively but in the third year, the income increased by 15%. What was his income at the end of third year ?









  1. View Hint View Answer Discuss in Forum

    Given, P = ₹ 4000
    R1= 10% (decreased), R2 = 5% (decreases) and R3 = 15% (growth)
    ∴ According to the formula,
    Income at the end of third year = P(1 - R1/100)(1 - R2/100)(1 + R3/100)
    = 4000(1- 10/100) (1 - 5/100) (1 + 15/100)

    Correct Option: A

    Given, P = ₹ 4000
    R1= 10% (decreased), R2 = 5% (decreases) and R3 = 15% (growth)
    ∴ According to the formula,
    Income at the end of third year = P(1 - R1/100)(1 - R2/100)(1 + R3/100)
    = 4000(1- 10/100) (1 - 5/100) (1 + 15/100)
    = 4000 x (9/10) x (19/20) x (23/20)
    = 9 x 19 x 23
    = ₹ 3933



  1. The compound interest on a sum of ₹ 4000 becomes ₹ 630.50 in 9 months. Find the rate of interest, if interest is compounded quarterly.









  1. View Hint View Answer Discuss in Forum

    Given, P =₹ 4000,
    n = 9 months = 3/4 yr and
    CI = ₹ 630.50
    Amount = P + CI = 4000 + 630.50 = ₹ 4630.50

    According to the formula,
    ⇒ Amount = P[(1+R/(100 x 4)]4n
    ⇒ 4630.50 = 4000(1+R/400)4 x 3/4

    Correct Option: A

    Given, P =₹ 4000,
    n = 9 months = 3/4 yr and
    CI = ₹ 630.50
    Amount = P + CI = 4000 + 630.50 = ₹ 4630.50

    According to the formula,
    ⇒ Amount = P[(1+R/(100 x 4)]4n
    ⇒ 4630.50 = 4000(1+R/400)4 x 3/4
    ⇒ 4630.50 = 4000[(400 + R)/400]3
    ⇒ 4630.50/4000 = [(400 + R)/400]3
    ⇒ 9261/8000 = [(400 + R)/400]3
    ⇒ (21/20)3 = [(400 + R)/400]3
    ⇒ [(400 + R)/400]/400 = 21/20
    ⇒ 400 + R = 21 x 20 = 420
    ∴ R = 420 - 400 = 20%


  1. A sum of money lent at compound interest for 2 yr at 20 % pa would fetch ₹ 964 more, if the interest was payable half-yearly than if it was payable annually. What is the sum ?









  1. View Hint View Answer Discuss in Forum

    Let the sum be ₹ P .
    Then, CI when compounded half - yearly = [P x (1 + 10/100)4 - P] = 4641P/10000
    CI when compounded annually = [ P x (1 + 20/100)2 - P] = 11P/25
    According to the question, 4641P/10000 - 11P/25 = 964
    ⇒ [(4641 - 4400)/10000] x P = 964

    Correct Option: A

    Let the sum be ₹ P .
    Then, CI when compounded half - yearly = [P x (1 + 10/100)4 - P] = 4641P/10000
    CI when compounded annually = [ P x (1 + 20/100)2 - P] = 11P/25
    According to the question, 4641P/10000 - 11P/25 = 964
    ⇒ [(4641 - 4400)/10000] x P = 964
    ∴ P = (964 x 10000)/241
    = ₹ 40000



  1. SBI lent ₹ 1331 lakh to the TATA group at compound interest and got ₹1728 lakh after 3 yr. What is the rate of interest charged, if compounded annually?









  1. View Hint View Answer Discuss in Forum

    According to the question,
    1728 = 1331(1 + R/100)3
    1728/1331 = (1 + R/100)3
    ⇒ (12/11)3 = (1 + R/100)3

    Correct Option: B

    According to the question,
    1728 = 1331(1 + R/100)3
    1728/1331 = (1 + R/100)3
    ⇒ (12/11)3 = (1 + R/100)3
    ⇒ 1 + R/100 = 12/11
    ⇒ R/100 = (12/11) - 1 = 1/11
    ∴ R = 100/11= 9.09%