# Compound Interest Questions and Answers

## Problems and Answers on compound Interest

Basic concept of Compound Interest and Compound Interest Questions and Answers are discussed below.

Compound Interest
Sometimes it also happens that the borrower and the money lender agree to fix up a certain period, say quarterly or half- yearly or yearly, to resolve the former account.

In such cases, the sum after the initial part of the time becomes the principal for the second unit, the amount after the second unit becomes the principal for the third unit and so on.
After a certain period, the difference between the amount and the money borrowed is called the Compound Interest for that period of time. ### Important Formulae to solve Compound Interest Questions :

• $P [1+ \frac{R}{100}]^{T}$

This formula is applied to calculate when money is compounded annually.

• $P [1+ \frac{R}{2\times 100}]^{2T}$

This formula is applied to calculate when money is compounded half-yearly

• $P [1+ \frac{R}{12\times 100}]^{12T}$

This formula is applied when money in compounded monthly. ### Compound Interest Questions and Answers

Example 1:

The compound interest on Rs. 10,000 in 2 years at 4% per annum, the interest being compounded yearly, is

Options:

a. Rs 636.80
b. Rs 816
c. Rs 912
d. Rs 882.82

Explanation:

Rate of interest = 4%

Therefore, applying the net% effect formula for effective rate of compound interest for 2 years , we get

Net% effect = $x + y + \frac{xy}{100}\%$

x = y = 4%

$= 4 + 4 + \frac{4\times 4}{100} = 8 + .16 = 8.16\%$

CI = 8.16% of 10,000

$= \frac{8.16\times 10000}{100} = ₹ 816$

Hence, option B is correct,

Question 1 Time: 00:00:00
If 50000 sums to 58694 in 2 years. Find out the rate of interest. 5%

5%

4%

4%

8%

8%

9%

9%

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Question 2 Time: 00:00:00
Calculate the compound interest on Rs 9,000 at an annual rate of 15% for 2 years and 4 months? INR 3497.625

INR 3497.625

INR 4500.08

INR 4500.08

INR 3987.76

INR 3987.76

INR 3154.34

INR 3154.34

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Question 3 Time: 00:00:00
What would be the compound interest on Rs 8000 for 4 years at 8 % per annum?

Note: the interest is calculated half-yearly. 3900

3900

2948

2948

2700

2700

4345

4345

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Question 4 Time: 00:00:00
The difference between Simple interest and compound interest for 2 years at the rate of 10% per annum on a particular amount of money is Rs20. Calculate the amount: 2000

2000

3000

3000

6000

6000

5500

5500

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Question 5 Time: 00:00:00
If the annual increase in the inhabitants of a particular city is 7% and the total number of residents in that specific locality is 13560 what will be the population of that same city in the coming 3 years? 17000

17000

18967.22

18967.22

16612

16612

19873

19873

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Question 6 Time: 00:00:00
Calculate the actual rate of interest corresponding to an itemized rate of 9% compound semi-annually. 20%

20%

10%

10%

9.20%

9.20%

8.90%

8.90%

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Question 7 Time: 00:00:00
Sumit invested in the bank on which he gets an interest of 4.9% compounded monthly. Calculate the actual interest rate. 8%

8%

8.87%

8.87%

5.01%

5.01%

7.24%

7.24%

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Question 8 Time: 00:00:00
Manoj bought a microwave on which he has to pay INR 2000 cash as a down payment. After this he is supposed to pay INR 1,500 at the completion of 1st year, INR 1,050 at the completion of 2nd year and INR 930 at the completion of 3rd The interest rate on this is 10%. Compute the total cash price: 9800

9800

5678

5678

5643

5643

4930

4930

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Question 9 Time: 00:00:00
Amanpreet invested his savings in such a way that his money grows up to INR 4645 in every two years and up to 5500 in 3 every year including the interest compounded. Calculate the interest rate applicable to earn this much of money? 20%

20%

19%

19%

19.05%

19.05%

18%

18%

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Question 10 Time: 00:00:00
Calculate the compound interest on INR 28,750 for 2 years. The interest was calculated as 4% in the first year and 8% in second year. 2500

2500

3002

3002

3798

3798

3542

3542

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Question 11 Time: 00:00:00
A particular sum of money gets 9 times in two years? What will be the compound rate of interest applicable in that case? 160

160

90

90

200

200

55

55

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Question 12 Time: 00:00:00
what will be the difference between the C.I.(Compound Interest) and S.I.(Simple Interest) on a Rs 4525 for 3 years at 8% p.a. payable yearly? 93.1

93.1

45.4

45.4

72.25

72.25

89.19

89.19

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Question 13 Time: 00:00:00
Ahmed took a loan of ₹20000 against a fixed deposit to purchase a scooter. If the interest rate is 10% p.a. Compounded every 6months or half-yearly. Find the amount that he pays after one and a half years. 23152.5

23152.5

24500

24500