Compound Interest Questions Answers

1. Find the compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually.
 Rs. 610
 Rs. 612
 Rs. 614
 Rs. 616
Answer And Explanation
Answer: Option B
Explanation:
\begin{aligned}
Amount = [7500 \times (1+ \frac{4}{100})^2] \\
= (7500 \times \frac{26}{25} \times \frac{26}{25}) \\
= 8112 \\
\end{aligned}
So compound interest = (8112  7500) = 612 
2. Albert invested amount of 8000 in a fixed deposit for 2 years at compound interest rate of 5 % per annum. How much Albert will get on the maturity of the fixed deposit.
 Rs. 8510
 Rs. 8620
 Rs. 8730
 Rs. 8820
Answer And Explanation
Answer: Option D
Explanation:
\begin{aligned}
=> (8000 \times(1+\frac{5}{100})^2) \\
=> 8000 \times \frac{21}{20}\times \frac{21}{20} \\
=> 8820
\end{aligned}

3. What will be the compound interest on Rs. 25000 after 3 years at the rate of 12 % per annum
 Rs 10123.20
 Rs 10123.30
 Rs 10123.40
 Rs 10123.50
Answer And Explanation
Answer: Option A
Explanation:
\begin{aligned}
(25000 \times (1 + \frac{12}{100})^3) \\
=> 25000\times\frac{28}{25}\times\frac{28}{25}\times\frac{28}{25} \\
=> 35123.20 \\
\end{aligned}
So Compound interest will be 35123.20  25000
= Rs 10123.20 
4. A man saves Rs 200 at the end of each year and lends the money at 5% compound interest. How much will it become at the end of 3 years.
 Rs 662
 Rs 662.01
 Rs 662.02
 Rs 662.03
Answer And Explanation
Answer: Option C
Explanation:
\begin{aligned}
[200(1+\frac{5}{100})^3 + 200(1+\frac{5}{100})^2+ \\ 200(1+\frac{5}{100})]
= [200(\frac{21}{20} \times \frac{21}{20} \times \frac{21}{20})\\
+ 200(\frac{21}{20}\times\frac{21}{20})+200(\frac{21}{20})] \\
= 662.02
\end{aligned} 
5. Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually
 Rs 312
 Rs 412
 Rs 512
 Rs 612
Answer And Explanation
Answer: Option D
Explanation:
Please apply the formula
\begin{aligned}
Amount = P(1+\frac{R}{100})^n \\
\text{C.I. = Amount  P}
\end{aligned} 
6. Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quarterly
 Rs 2520
 Rs 2521
 Rs 2522
 Rs 2523
Answer And Explanation
Answer: Option C
Explanation:
Please remember, when we have to calculate C.I. quarterly then we apply following formula if n is the number of years
\begin{aligned}
Amount = P(1+\frac{\frac{R}{4}}{100})^{4n}
\end{aligned}
Principal = Rs.16,000;
Time=9 months = 3 quarters;
Rate = 20%, it will be 20/4 = 5%
So lets solve this question now,
\begin{aligned}
Amount = 16000(1+\frac{5}{100})^3 \\
= 18522\\
C.I = 18522  16000 = 2522
\end{aligned} 
7. The present worth of Rs.169 due in 2 years at 4% per annum compound interest is
 Rs 155.25
 Rs 156.25
 Rs 157.25
 Rs 158.25
Answer And Explanation
Answer: Option B
Explanation:
In this type of question we apply formula
\begin{aligned}
Amount = \frac{P}{(1+\frac{R}{100})^n} \\
Amount = \frac{169}{(1+\frac{4}{100})^2} \\
Amount = \frac{169 * 25 * 25}{26*26} \\
Amount = 156.25
\end{aligned}

sharath kumar 4 years ago
631.525

naresh aswani 5 years ago
Why use this formula in quetion number 7.
As this question is as similar as other question like we have principal, rate ,interest.
Plzz help me .. 
Nitesh Bibra 6 years ago
can any1 xpalin 8th question how does it solve and get 6.....

AKsingh 6 years ago
can any one explain 15

Sheenu Mehra 7 years ago
in 4th question, 200 rupee deposite every year, so amount is calculated first 200 for 3 years, then 200 for 2 years which is deposite in 2nd year, then 200 for 1 year which is deposite in 3rd year, at last all amount is added

hemanth 8 years ago
Helpful. Very good questions. Easy to understand for beginners.

karzan 8 years ago
Her helpful work... Thank you..