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Compound Interest Question Answer,Compound Interest Formula:
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Compound Interest: Sometimes it so happens that the borrower and the lender agree to fix up a certain unit of time, say yearly or halfyearly or quarterly to settle the previous account. In such cases, the amount after first unit of time becomes the principal for the second unit,the amount after second unit becomes the principal for the third unit and so on.
After a specified period, the difference between the amount and the money borrowed is called the Compound Interest (abbreviated as C.I.) for that period.
How to Calculate Compound Interest :
Let Principal = P, Rate = R% per annum, Time = n years.
 When interest is compound Annually:
Amount = P(1+R/100)^{n}
 When interest is compounded Halfyearly:
Amount = P[1+(R/2)/100]^{2n}
III. When interest is compounded Quarterly:
Amount = P[ 1+(R/4)/100]^{4n}
 When interest is compounded AnnuaI1y but time is in fraction, say 3(2/5)
years.
Amount = P(1+R/100)^{3 }^{x} (1+(2R/5)/100)
 When Rates are different for different years, say Rl%, R2%, R3% for 1st,
2nd and 3rd year
respectively.
Then, Amount = P(1+R1/100)(1+R2/100)(1+R3/100)
 Present worth of Rs.x due n years hence is given by :
Present Worth = x/(1+(R/100))^{n}
Compound Interest Problems
Ex.1. Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually.
Sol. Amount = Rs [7500*(1+(4/100)^{2}] = Rs (7500 * (26/25) * (26/25)) = Rs. 8112. therefore, C.I. = Rs. (8112 – 7500) = Rs. 612.
Ex. 2. Find compound interest on Rs. 8000 at 15% per annum for 2 years 4 months, compounded annually.
Sol. Time = 2 years 4 months = 2(4/12) years = 2(1/3) years.
Amount = Rs’. [8000 X (1+(15/100))^{2} X (1+((1/3)*15)/100)]
=Rs. [8000 * (23/20) * (23/20) * (21/20)]
= Rs. 11109
:. C.I. = Rs. (11109 – 8000) = Rs. 3109.
Ex. 3. Find the compound interest on Rs. 10,000 in 2 years at 4% per annum, the interest being compounded halfyearly.
Sol. Principal = Rs. 10000; Rate = 2% per halfyear; Time = 2 years = 4 halfyears.
Amount = Rs [10000 * (1+(2/100))^{4}] = Rs(10000 * (51/50) * (51/50) * (51/50) * (51/50))
= Rs. 10824.32.
:. C.I. = Rs. (10824.32 – 10000) = Rs. 824.32.
Ex. 4. Find the compound interest on Rs. 16,000 at 20% per annum for 9 months, compounded quarterly.
Sol. Principal = Rs. 16000; Time = 9 months =3 quarters;
Rate = 20% per annum = 5% per quarter.
Amount = Rs. [16000 x (1+(5/100))^{3}] = Rs. 18522.
 = Rs. (18522 – 16000) = Rs. 2522.
Ex. 5. If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200, find the compound interest on the same sum for the same period at the same rate.
Sol. Clearly, Rate = 5% p.a., Time = 3 years, S.I.= Rs. 1200. . .
So principal=RS [100*1200]/3*5=RS 8000
Amount = Rs. 8000 x [1 +5/100]^3 – = Rs. 9261.
.. C.I. = Rs. (9261 – 8000) = Rs. 1261.
Ex. 6. In what time will Rs. 1000 become Rs. 1331 at 10% per annum compounded annually?
Sol. Principal = Rs. 1000; Amount = Rs. 1331; Rate = 10% p.a. Let the time be n years. Then,
[ 1000 (1+ (10/100))^{n }] = 1331 or (11/10)^{n = }(1331/1000) = (11/10)^{3}
n = 3 years.
Ex. 7. If Rs. 600 amounts to Rs. 683.20 in two years compounded annually, find the rate of interest per annum.
Sol. Principal = Rs. 500; Amount = Rs. 583.20; Time = 2 years.
Let the rate be R% per annum.. ‘Then,
[ 500 (1+(R/100)^{2 }] = 583.20 or [ 1+ (R/100)]^{2 = }5832/5000 = 11664/10000
[ 1+ (R/100)]^{2 }= (108/100)^{2} or 1 + (R/100) = 108/100 or R = 8
So, rate = 8% p.a.
Ex. 8. If the compound interest on a certain sum at 16 (2/3)% to 3 years is Rs.1270, find the simple interest on the same sum at the same rate and f or the same period.
Sol. Let the sum be Rs. x. Then,
C.I. = [ x * (1 + (( 50/(3*100))^{3} – x ] = ((343x / 216) – x) = 127x / 216
127x /216 = 1270 or x = (1270 * 216) / 127 = 2160.
Thus, the sum is Rs. 2160
S.I. = Rs ( 2160 * (50/3) * 3 * (1 /100 ) ) = Rs. 1080.
Ex. 9. The difference between the compound interest and simple interest on a certain sum at 10% per annum for 2 years is Rs. 631. Find the sum.
Sol. Let the sum be Rs. x. Then,
C.I. = x ( 1 + ( 10 /100 ))^{2 }– x = 21x / 100 ,
S.I. = (( x * 10 * 2) / 100) = x / 5
(C.I) – (S.I) = ((21x / 100 ) – (x / 5 )) = x / 100
( x / 100 ) = 632 x = 63100.
Hence, the sum is Rs.63,100.
Ex. 10. The difference between the compound interest and the simple interest accrued on an amount of Rs. 18,000 in 2 years was Rs. 405. What was the rate of interest p.c.p.a. ?
Sol. Let the rate be R% p.a. then,
[ 18000 ( 1 + ( R / 100 )^{2 }) – 18000 ] – ((18000 * R * 2) / 100 ) = 405
18000 [ ( 100 + (R / 100 )^{2 } / 10000) – 1 – (2R / 100 ) ] = 405
18000[( (100 + R )^{ 2} – 10000 – 200R) / 10000 ] = 405
9R^{2} / 5 = 405 R^{2} =((405 * 5 ) / 9) = 225
R = 15.
Rate = 15%.
Ex. 11. Divide Rs. 1301 between A and B, so that the amount of A after 7 years is equal to the amount of B after 9 years, the interest being compounded at 4% per annum.
Sol. Let the two parts be Rs. x and Rs. (1301 – x).
x(1+4/100)^{7 }=(1301x)(1+4/100)^{9}
x/(1301x)=(1+4/100)^{2}=(26/25*26/25)
625x=676(1301x)
1301x=676*1301
x=676.
So,the parts are rs.676 and rs.(1301676)i.e rs.676 and rs.625.
Ex.12. a certain sum amounts to rs.7350 in 2 years and to rs.8575 in 3 years.find the sum and rate percent.
S.I on rs.7350 for 1 year=rs.(85757350)=rs.1225.
Rate=(100*1225/7350*1)%=16 2/3%
Let the sum be rs.x.then,
X(1+50/3*100)^{2}=7350
X*7/6*7/6=7350
X=(7350*36/49)=5400.
Sum=rs.5400.
Ex.13.a sum of money amounts to rs.6690 after 3 years and to rs.10,035 after 6 years on compound interest.find the sum.
Sol. Let the sum be rs.P.then
P(1+R/100)^{3}=6690…(i) and P(1+R/100)^{6}=10035…(ii)
On dividing,we get (1+R/100)^{3}=10025/6690=3/2.
Substituting this value in (i),we get:
P*3/2=6690 or P=(6690*2/3)=4460
Hence,the sum is rs.4460.
Ex.14. a sum of money doubles itself at compound interest in 15 years.in how many years will it beco,e eight times?
P(1+R/100)^{15}=2P
(1+R/100)^{15}=2P/P=2
LET P(1+R/100)^{n}=8P
(1+R/100)^{n}=8=2^{3}={(1+R/100)^{15}}^{3}[USING (I)]
(1+R/100)^{N}=(1+R/100)^{45}
n=45.
Thus,the required time=45 years.
Ex.15.What annual payment will discharge a debt of Rs.7620 due in 3years at 16 2/3% per annum interest?
Sol. Let each installment beRs.x.
Then,(P.W. of Rs.x due 1 year hence)+(P>W of Rs.x due 2 years hence)+(P.W of Rs. X due 3
years hence)=7620.
\ x/(1+(50/3*100))+ x/(1+(50/3*100))^{2} + x/(1+(50/3*100))^{3}=7620
Û(6x/7)+(936x/49)+(216x/343)=7620.
Û294x+252x+216x=7620*343.
Û x=(7620*343/762)=3430.
\Amount of each installment=Rs.3430.
Compound Question And Answer Quiz
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Question 1 of 30
1. Question
Find the compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually.
Correct
Amount=[7500×(1+4100)2]=(7500×2625×2625)=8112Amount=[7500×(1+4100)2]=(7500×2625×2625)=8112
So compound interest = (8112 – 7500) = 612
Incorrect
Amount=[7500×(1+4100)2]=(7500×2625×2625)=8112Amount=[7500×(1+4100)2]=(7500×2625×2625)=8112
So compound interest = (8112 – 7500) = 612

Question 2 of 30
2. Question
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.
Correct
Explanation:
=>(8000×(1+5100)2)=>8000×2120×2120=>8820=>(8000×(1+5100)2)=>8000×2120×2120=>8820Incorrect
Explanation:
=>(8000×(1+5100)2)=>8000×2120×2120=>8820=>(8000×(1+5100)2)=>8000×2120×2120=>8820 
Question 3 of 30
3. Question
What will be the compound interest on Rs. 25000 after 3 years at the rate of 12 % per annum
Correct
Explanation:
(25000×(1+12100)3)=>25000×2825×2825×2825=>35123.20(25000×(1+12100)3)=>25000×2825×2825×2825=>35123.20So Compound interest will be 35123.20 – 25000
= Rs 10123.20Incorrect
Explanation:
(25000×(1+12100)3)=>25000×2825×2825×2825=>35123.20(25000×(1+12100)3)=>25000×2825×2825×2825=>35123.20So Compound interest will be 35123.20 – 25000
= Rs 10123.20 
Question 4 of 30
4. Question
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.
Correct
Explanation:
=[200(2120×2120×2120)+200(2120×2120)+200(2120)]=662.02=[200(2120×2120×2120)+200(2120×2120)+200(2120)]=662.02Incorrect
Explanation:
=[200(2120×2120×2120)+200(2120×2120)+200(2120)]=662.02=[200(2120×2120×2120)+200(2120×2120)+200(2120)]=662.02 
Question 5 of 30
5. Question
Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually
Correct
Explanation:
Please apply the formula
Amount=P(1+R100)nC.I. = Amount – PAmount=P(1+R100)nC.I. = Amount – PIncorrect
Explanation:
Please apply the formula
Amount=P(1+R100)nC.I. = Amount – PAmount=P(1+R100)nC.I. = Amount – P 
Question 6 of 30
6. Question
Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quarterly
Correct
Explanation:
Please remember, when we have to calculate C.I. quarterly then we apply following formula if n is the number of yearsAmount=P(1+R4100)4nAmount=P(1+R4100)4n
Principal = Rs.16,000;
Time=9 months = 3 quarters;
Rate = 20%, it will be 20/4 = 5%So lets solve this question now,
Amount=16000(1+5100)3=18522C.I=18522−16000=2522Amount=16000(1+5100)3=18522C.I=18522−16000=2522
Incorrect
Explanation:
Please remember, when we have to calculate C.I. quarterly then we apply following formula if n is the number of yearsAmount=P(1+R4100)4nAmount=P(1+R4100)4n
Principal = Rs.16,000;
Time=9 months = 3 quarters;
Rate = 20%, it will be 20/4 = 5%So lets solve this question now,
Amount=16000(1+5100)3=18522C.I=18522−16000=2522Amount=16000(1+5100)3=18522C.I=18522−16000=2522

Question 7 of 30
7. Question
The present worth of Rs.169 due in 2 years at 4% per annum compound interest is
Correct
Explanation:
In this type of question we apply formulaAmount=P(1+R100)nAmount=169(1+4100)2Amount=169∗25∗2526∗26Amount=156.25Amount=P(1+R100)nAmount=169(1+4100)2Amount=169∗25∗2526∗26Amount=156.25
Incorrect
Explanation:
In this type of question we apply formulaAmount=P(1+R100)nAmount=169(1+4100)2Amount=169∗25∗2526∗26Amount=156.25Amount=P(1+R100)nAmount=169(1+4100)2Amount=169∗25∗2526∗26Amount=156.25

Question 8 of 30
8. Question
At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years
Correct
Explanation:
Let Rate will be R%1200(1+R100)2=134832100(1+R100)2=134832120000(1+R100)2=1123610000(1+R100)=106100=>R=6%1200(1+R100)2=134832100(1+R100)2=134832120000(1+R100)2=1123610000(1+R100)=106100=>R=6%
Incorrect
Explanation:
Let Rate will be R%1200(1+R100)2=134832100(1+R100)2=134832120000(1+R100)2=1123610000(1+R100)=106100=>R=6%1200(1+R100)2=134832100(1+R100)2=134832120000(1+R100)2=1123610000(1+R100)=106100=>R=6%

Question 9 of 30
9. Question
The least number of complete years in which a sum of money put out at 20% compound interest will be more than doubled is
Correct
Explanation:
As per question we need something like followingP(1+R100)n>2P(1+20100)n>2(65)n>265×65×65×65>2P(1+R100)n>2P(1+20100)n>2(65)n>265×65×65×65>2
So answer is 4 yearsIncorrect
Explanation:
As per question we need something like followingP(1+R100)n>2P(1+20100)n>2(65)n>265×65×65×65>2P(1+R100)n>2P(1+20100)n>2(65)n>265×65×65×65>2
So answer is 4 years 
Question 10 of 30
10. Question
Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is
Correct
Explanation:
C.I.=(4000×(1+10100)2−4000)=4000∗1110∗1110−4000=840So S.I. = 8402=420So Sum = S.I.∗100R∗T=420∗1003∗8=Rs1750C.I.=(4000×(1+10100)2−4000)=4000∗1110∗1110−4000=840So S.I. = 8402=420So Sum = S.I.∗100R∗T=420∗1003∗8=Rs1750Incorrect
Explanation:
C.I.=(4000×(1+10100)2−4000)=4000∗1110∗1110−4000=840So S.I. = 8402=420So Sum = S.I.∗100R∗T=420∗1003∗8=Rs1750C.I.=(4000×(1+10100)2−4000)=4000∗1110∗1110−4000=840So S.I. = 8402=420So Sum = S.I.∗100R∗T=420∗1003∗8=Rs1750 
Question 11 of 30
11. Question
In what time will Rs.1000 become Rs.1331 at 10% per annum compounded annually
Correct
Explanation:
Principal = Rs.1000;
Amount = Rs.1331;
Rate = Rs.10%p.a.Let the time be n years then,
1000(1+10100)n=1331(1110)n=13311000(1110)3=133110001000(1+10100)n=1331(1110)n=13311000(1110)3=13311000
So answer is 3 years
Incorrect
Explanation:
Principal = Rs.1000;
Amount = Rs.1331;
Rate = Rs.10%p.a.Let the time be n years then,
1000(1+10100)n=1331(1110)n=13311000(1110)3=133110001000(1+10100)n=1331(1110)n=13311000(1110)3=13311000
So answer is 3 years

Question 12 of 30
12. Question
If the simple interest on a sum of money for 2 years at 5% per annum is Rs.50, what will be the compound interest on same valuesIf the simple interest on a sum of money for 2 years at 5% per annum is Rs.50, what will be the compound interest on same values
Correct
Explanation:
S.I.=P∗R∗T100P=50∗1005∗2=500Amount=500(1+5100)2500(2120∗2120)=551.25C.I.=551.25−500=51.25S.I.=P∗R∗T100P=50∗1005∗2=500Amount=500(1+5100)2500(2120∗2120)=551.25C.I.=551.25−500=51.25Incorrect
Explanation:
S.I.=P∗R∗T100P=50∗1005∗2=500Amount=500(1+5100)2500(2120∗2120)=551.25C.I.=551.25−500=51.25S.I.=P∗R∗T100P=50∗1005∗2=500Amount=500(1+5100)2500(2120∗2120)=551.25C.I.=551.25−500=51.25 
Question 13 of 30
13. Question
What will be the difference between simple and compound interest @ 10% per annum on the sum of Rs 1000 after 4 years
Correct
Explanation:
S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=464.10S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=64.10Incorrect
Explanation:
S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=464.10S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=64.10 
Question 14 of 30
14. Question
What will be the difference between simple and compound interest @ 10% per annum on the sum of Rs 1000 after 4 years
Correct
Explanation:
S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=464.10S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=64.10Incorrect
Explanation:
S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=464.10S.I.=1000∗10∗4100=400C.I.=[1000(1+10100)4−1000]=64.10 
Question 15 of 30
15. Question
The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Rs 1. Find the sum
Correct
Explanation:
Let the Sum be PS.I.=P∗4∗2100=2P25C.I.=P(1+4100)2−P=676P625−P=51P625As, C.I. – S.I = 1=>51P625−2P25=1=>51P−50P625=1P=625S.I.=P∗4∗2100=2P25C.I.=P(1+4100)2−P=676P625−P=51P625As, C.I. – S.I = 1=>51P625−2P25=1=>51P−50P625=1P=625
Incorrect

Question 16 of 30
16. Question
Effective annual rate of interest corresponding to nominal rate of 6% per annum compounded half yearly will be
Correct
Explanation:
Let the amount Rs 100 for 1 year when compounded half yearly, n = 2, Rate = 6/2 = 3%Amount=100(1+3100)2=106.09Amount=100(1+3100)2=106.09
Effective rate = (106.09 – 100)% = 6.09%
Incorrect
Explanation:
Let the amount Rs 100 for 1 year when compounded half yearly, n = 2, Rate = 6/2 = 3%Amount=100(1+3100)2=106.09Amount=100(1+3100)2=106.09
Effective rate = (106.09 – 100)% = 6.09%

Question 17 of 30
17. Question
A sum of money invested at compound interest to Rs. 800 in 3 years and to Rs 840 in 4 years. The rate on interest per annum is.
Correct
Answer: Option B
Explanation:
S.I. on Rs 800 for 1 year = 40Rate = (100*40)/(800*1) = 5%
Incorrect
Answer: Option B
Explanation:
S.I. on Rs 800 for 1 year = 40Rate = (100*40)/(800*1) = 5%

Question 18 of 30
18. Question
A bank offers 5% compound interest calculated on halfyearly basis. A customer deposits Rs. 1600 each on 1^{st} January and 1^{st} July of a year. At the end of the year, the amount he would have gained by way of interest is:
Correct
Explanation:
Amount = Rs. 1600 x 1 + 5 2 + 1600 x 1 + 5 2 x 100 2 x 100 = Rs. 1600 x 41 x 41 + 1600 x 41 40 40 40 = Rs. 1600 x 41 41 + 1 40 40 = Rs. 1600 x 41 x 81 40 x 40 = Rs. 3321. C.I. = Rs. (3321 – 3200) = Rs. 121
Incorrect
Explanation:
Amount = Rs. 1600 x 1 + 5 2 + 1600 x 1 + 5 2 x 100 2 x 100 = Rs. 1600 x 41 x 41 + 1600 x 41 40 40 40 = Rs. 1600 x 41 41 + 1 40 40 = Rs. 1600 x 41 x 81 40 x 40 = Rs. 3321. C.I. = Rs. (3321 – 3200) = Rs. 121

Question 19 of 30
19. Question
The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is: Correct
Let the sum be Rs. x. Then,
C.I. = x 1 + 4 2 – x = 676 x – x = 51 x. 100 625 625 S.I. = x x 4 x 2 = 2x . 100 25 51x – 2x = 1 625 25 x = 625.
Incorrect
Let the sum be Rs. x. Then,
C.I. = x 1 + 4 2 – x = 676 x – x = 51 x. 100 625 625 S.I. = x x 4 x 2 = 2x . 100 25 51x – 2x = 1 625 25 x = 625.

Question 20 of 30
20. Question
There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest of Rs. 12,000 after 3 years at the same rate?
Correct
Explanation:
Let P = Rs. 100. Then, S.I. Rs. 60 and T = 6 years.
R = 100 x 60 = 10% p.a. 100 x 6 Now, P = Rs. 12000. T = 3 years and R = 10% p.a.
C.I. = Rs. 12000 x 1 + 10 3 – 1 100 = Rs. 12000 x 331 1000 = 3972. Incorrect
Explanation:
Let P = Rs. 100. Then, S.I. Rs. 60 and T = 6 years.
R = 100 x 60 = 10% p.a. 100 x 6 Now, P = Rs. 12000. T = 3 years and R = 10% p.a.
C.I. = Rs. 12000 x 1 + 10 3 – 1 100 = Rs. 12000 x 331 1000 = 3972. 
Question 21 of 30
21. Question
The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:
Correct
Amount = Rs. (30000 + 4347) = Rs. 34347.
Let the time be n years.
Then, 30000 1 + 7 n = 34347 100 107 n = 34347 = 11449 = 107 2 100 30000 10000 100 n = 2 years.
Incorrect
Amount = Rs. (30000 + 4347) = Rs. 34347.
Let the time be n years.
Then, 30000 1 + 7 n = 34347 100 107 n = 34347 = 11449 = 107 2 100 30000 10000 100 n = 2 years.

Question 22 of 30
22. Question
What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12 p.c.p.a.? Correct
Explanation:
Amount = Rs. 25000 x 1 + 12 3 100 = Rs. 25000 x 28 x 28 x 28 25 25 25 = Rs. 35123.20 C.I. = Rs. (35123.20 – 25000) = Rs. 10123.20
Incorrect
Explanation:
Amount = Rs. 25000 x 1 + 12 3 100 = Rs. 25000 x 28 x 28 x 28 25 25 25 = Rs. 35123.20 C.I. = Rs. (35123.20 – 25000) = Rs. 10123.20

Question 23 of 30
23. Question
At what rate of compound interest per annum will a sum of Rs. 1200 become Rs. 1348.32 in 2 years?
Correct
Explanation:
Let the rate be R% p.a.
Then, 1200 x 1 + R 2 = 1348.32 100 1 + R 2 = 134832 = 11236 100 120000 10000 1 + R 2 = 106 2 100 100 1 + R = 106 100 100 R = 6%
Incorrect
Explanation:
Let the rate be R% p.a.
Then, 1200 x 1 + R 2 = 1348.32 100 1 + R 2 = 134832 = 11236 100 120000 10000 1 + R 2 = 106 2 100 100 1 + R = 106 100 100 R = 6%

Question 24 of 30
24. Question
The least number of complete years in which a sum of money put out at 20% compound interest will be more than doubled is: Correct
Explanation:
P 1 + 20 n > 2P 6 n > 2. 100 5 Now, 6 x 6 x 6 x 6 > 2. 5 5 5 5 So, n = 4 years.
Incorrect
Explanation:
P 1 + 20 n > 2P 6 n > 2. 100 5 Now, 6 x 6 x 6 x 6 > 2. 5 5 5 5 So, n = 4 years.

Question 25 of 30
25. Question
Albert invested an amount of Rs. 8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit? Correct
Amount = Rs. 8000 x 1 + 5 2 100 = Rs. 8000 x 21 x 21 20 20 = Rs. 8820. Incorrect
Amount = Rs. 8000 x 1 + 5 2 100 = Rs. 8000 x 21 x 21 20 20 = Rs. 8820. 
Question 26 of 30
26. Question
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable halfyearly is:
Correct
Amount of Rs. 100 for 1 year
when compounded halfyearly= Rs. 100 x 1 + 3 2 = Rs. 106.09 100 Effective rate = (106.09 – 100)% = 6.09%
Incorrect
Amount of Rs. 100 for 1 year
when compounded halfyearly= Rs. 100 x 1 + 3 2 = Rs. 106.09 100 Effective rate = (106.09 – 100)% = 6.09%

Question 27 of 30
27. Question
Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is:
Correct
Explanation:
C.I. = Rs. 4000 x 1 + 10 2 – 4000 100 = Rs. 4000 x 11 x 11 – 4000 10 10 = Rs. 840. Sum = Rs. 420 x 100 = Rs. 1750. 3 x 8 Incorrect
Explanation:
C.I. = Rs. 4000 x 1 + 10 2 – 4000 100 = Rs. 4000 x 11 x 11 – 4000 10 10 = Rs. 840. Sum = Rs. 420 x 100 = Rs. 1750. 3 x 8 
Question 28 of 30
28. Question
If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time? Correct
Explanation:
Sum = Rs. 50 x 100 = Rs. 500. 2 x 5 Amount = Rs. 500 x 1 + 5 2 100 = Rs. 500 x 21 x 21 20 20 = Rs. 551.25 C.I. = Rs. (551.25 – 500) = Rs. 51.25
Incorrect
Explanation:
Sum = Rs. 50 x 100 = Rs. 500. 2 x 5 Amount = Rs. 500 x 1 + 5 2 100 = Rs. 500 x 21 x 21 20 20 = Rs. 551.25 C.I. = Rs. (551.25 – 500) = Rs. 51.25

Question 29 of 30
29. Question
The difference between simple interest and compound on Rs. 1200 for one year at 10% per annum reckoned halfyearly is: Correct
Explanation:
S.I. = Rs 1200 x 10 x 1 = Rs. 120. 100 C.I. = Rs. 1200 x 1 + 5 2 – 1200 = Rs. 123. 100 Difference = Rs. (123 – 120) = Rs. 3.
Incorrect
Explanation:
S.I. = Rs 1200 x 10 x 1 = Rs. 120. 100 C.I. = Rs. 1200 x 1 + 5 2 – 1200 = Rs. 123. 100 Difference = Rs. (123 – 120) = Rs. 3.

Question 30 of 30
30. Question
The difference between compound interest and simple interest on an amount of Rs. 15,000 for 2 years is Rs. 96. What is the rate of interest per annum? Correct
Explanation:
15000 x 1 + R 2 – 15000 – 15000 x R x 2 = 96 100 100 15000 1 + R 2 – 1 – 2R = 96 100 100 15000 (100 + R)^{2} – 10000 – (200 x R) = 96 10000 R^{2} = 96 x 2 = 64 3 R = 8.
Rate = 8%.
Incorrect
Explanation:
15000 x 1 + R 2 – 15000 – 15000 x R x 2 = 96 100 100 15000 1 + R 2 – 1 – 2R = 96 100 100 15000 (100 + R)^{2} – 10000 – (200 x R) = 96 10000 R^{2} = 96 x 2 = 64 3 R = 8.
Rate = 8%.
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