Compound Interest
- Neeraj saves Rs. 400 at the end of each year and lends this saving at 5% p.a. compound interest, How much will it worth at the end of 3 years ?
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Amount after 3 years = 400(1 + 5/100)3 + 400(1 + 5/100)2 + 400(1 + 5/100)
Correct Option: D
Amount after 3 years = 400(1 + 5/100)3 + 400(1 + 5/100)2 + 400(1 + 5/100)
= 400(1+ 5/100) {1+ 5/100)2 + (1 + 5/100) + 1 }
= 400(105/100) {(105/100)2 + (105/100) + 1}
= 400(21/20) {(21/20)2 + 21/20 + 1}
= 400(441/400 + 21/20 + 1)
= 400(441 + 420 + 400/400)
= 420(1261/400)
= Rs.1324.05
- If the simple interest on certain sum of money be Rs. 40 for 2 years and the compound interest on the same sum at the same rate and for the same time be Rs. 45. What is the principle ?
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S.I. for 2 year = Rs. 40
S.I. for 1 year = Rs. 20
Rate = C.I. for 2 year - S.I. for 2 year/ S.I. for 1 year x 100
=(45 - 40/20) x 100 = 25%
∴ Principal = S.I. x 100/Rate x Time
= 40 x 100 /25 x 2
= Rs. 80Correct Option: D
S.I. for 2 year = Rs. 40
S.I. for 1 year = Rs. 20
Rate = {(C.I. for 2 year - S.I. for 2 year) / (S.I. for 1 year)} x 100
= {(45 - 40) / 20} x 100 = 25%
∴ Principal = (S.I. x 100)/(Rate x Time)
= (40 x 100)/(25 x 2)
= Rs. 80
- A sum of Rs. 550 was taken as a loan. This is to be repaid in two equal annual instalments. if the rate of interested be 20% compound annually then the value of each instalment is ?
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Let the value of each instalment be Rs. x
Then, {x/(1 + 20/100) + x/(1 + 20/100)2} = 550Correct Option: C
Let the value of each instalment be Rs. x
Then, {x/(1 + 20/100) + x/(1 + 20/100)2} = 550
⇒ 5x / 6 + 25x / 36 =550
⇒ 55x / 36 = 550
∴ x = 360
- A man borrows Rs. 4000 from a bank at 71/2% compound interest. At the end of every he pays Rs. 1500 as part repayment of loan and interest. How much does he still owe to the bank after there such installments ?
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Balance = Rs.[{4000 x (1 x 15/2 x 100)3} - {1500 x (1 + 15/2 x 100)2 + 1500 x (1 + 15/2 x 100) + 1500}]
Correct Option: A
Balance = Rs.[{4000 x (1 x 15/2 x 100)3} - {1500 x (1 + 15/2 x 100)2 + 1500 x (1 + 15/2 x 100) + 1500}]
= Rs. 123.25
