Simple and Compound Interest Questions and Answers

September 15, 2023

Simple Interest and Compound Interest Questions

Simple and Compound Interest Questions and Answers are provided on this page for students to practice and get an idea how this topic is asked in the exam.
Simple Interest Questions and Answers

The formula of Simple Interest:

  • SI on Principal P at R% per annum for T years is denoted as:
    Simple Interest = (P*R*T)/100

Where, P=Principle, R=Rate(per annum), T=Total time

The formula for Compound Interest:

  • If Principal= Rs P, Time= t years and Rate= r% p.a., n=number of times the interest got compounded annualy. So the compound interest calculated annually will be:
    Amount after t years= P \left ( 1+\frac{r}{100n} \right )^{nt}
  • CI calculated half yearly:   Rate= r% per half year and n= 2.
    Amount after t years= P \left ( 1+\frac{r}{100\times 2} \right )^{2t}
  • CI calculated Quarterly:   Rate= r% per quarter; n= 4.
    Amount after t years= P \left ( 1+\frac{r}{100\times 4} \right )^{4t}
Questions on Simple and Compound Interest

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Practice Simple and Compound Interest Questions

1. Find the number of years the amount of Rs. 1500 will take to grow into Rs. 15000, if the rate of investment is 15% simple interest?

80

80

11.3%

60

60

75.12%

72

72

7.74%

56

56

5.85%

Let us assume the years as x

SI = \frac{P\times N\times R}{100}

Initial amount = 1500

Amount after simple interest = 15000

Therefore, interest = 15000 – 1500 = 13500

Taking time T as x

Thus, 13500 = \frac{1500\times x\times 15}{100}

1350000 = 22500x

x = 1350000/22500 = 60 Years

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

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2. Ashish lends Rs. 20000 in four different parts. If he gets 8% on Rs. 4000, 7.5% on Rs. 8000, and 8.5% on Rs. 2800. Find the percentage he will receive on the remaining amount if the annual average interest he gets is 8.13%?

10.5%

10.5%

16.79%

7%

7%

18.1%

9%

9%

57.5%

11%

11%

7.62%

Interest on Rs. 4000 at 8% = (8/100) * 4000 = Rs. 320 Interest on Rs. 8000 at 7.5% = (7.5/100) * 8000 = Rs. 600 Interest on Rs. 2800 at 8.5% = (8.5/100) * 2800 = Rs. 238

Total interest received on these amounts = Rs. 320 + Rs. 600 + Rs. 238 = Rs. 1158

Now, let's calculate the remaining amount:

Remaining amount = Rs. 20000 - Rs. 4000 - Rs. 8000 - Rs. 2800 = Rs. 5200

We know that the annual average interest received by Ashish is 8.13%. To find the interest on the remaining amount, we can set up the following equation:

(1158 + Interest on the remaining amount) / 20000 = 8.13/100

Let's solve for the interest on the remaining amount:

1158 + Interest on the remaining amount = (8.13/100) * 20000

1158 + Interest on the remaining amount = 1626

Interest on the remaining amount = 1626 - 1158 = 468

Now, let's calculate the percentage of interest received on the remaining amount:

Percentage of interest on the remaining amount = (468 / 5200) * 100

Percentage of interest on the remaining amount = 9%

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

3. Anil gave Rs. 7000 to Bhawani for 2 years. He also gave rs. 5000 to Chirag for 4 years. The money he gave was on simple interest and at a similar interest rate. The interest rate he received from both of them was rs. 3060. Find the interest rate per annum.

10%

10%

9.91%

7.5%

7.5%

16.44%

9%

9%

67.13%

11%

11%

6.52%

Let us assume the rate as r% per annum.

Then, \frac{7000\times r\times 2}{100} + \frac{5000\times r\times 4}{100}

140r + 200r = 3060

r = \frac{3060}{340} = 9

Rate = 9%.

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

4. Rs. 1725 is given by Prabha on loan at the starting of a year at a certain interest rate. She also gave rs. 1362.50 to her friend after 4 months, but this time the rate was two times the earlier ones. The total interest she earned from both the loans was rs. 133.50. Find out the original interest rate.

7.5%

7.5%

12.35%

9.7%

9.7%

17.22%

5.06%

5.06%

52.87%

4.89%

4.89%

17.57%

Let us assume the rate as r%.

Given, new interest rate = 2r%.

Given, the rate for 1 year

And, new rate = 4 months or 1/3  year(s).

Therefore, 1725 * r * 1 / 100 + 1362.5 * 2r * 1 / 100*3 = 133.5

= (5175 + 2725)r = 133.5 * 300

= 7900r = 40050

r = 40050/7900 = 5.06

Therefore, the original rate = 5.06%

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

5. Akash took loan @ 15% p.a. If after 5 years he is intended to pay Rs. 5400 simple interest, then find the principal amount he borrowed?

8000

8000

7.81%

7200

7200

79.78%

12000

12000

9.21%

9000

9000

3.21%

Amount = 100 * 5400  / 15 * 5

= 540000 / 75

= 7200

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

6. Find the number of years the amount of Rs. 1375 will take to grow into Rs. 20000, if the rate of investment is 15% simple interest?

115

115

9.97%

52

52

11.25%

77

77

5.95%

90.3

90.3

72.83%

Let us assume the years as x

SI = PxNxR/100,

Initial amount = 1375

Amount after simple interest = 20000

Therefore, interest = 20000 – 1375 = 18625

Thus, 18625 = 1375 * x * 15 /100

1862500 = 20625x

x = 1862500/20625 = 90. 3 Years

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

7. A person invests his savings half amount in a Fixed Deposits on which he received Rs. 550 as simple a simple interest amount for 2 years. He also financed the leftover in an F.D. for 2 years which gives compound interest, and the interest is being given annually, at a similar interest rate. The interest amount on this he got as Rs.605. Now before investment into the Fixed Deposit find out the price of his total savings?

5000

5000

16.8%

2200

2200

16.28%

1100

1100

14.21%

2750

2750

52.71%

Extra amount invested by a person (605 – 550)= Rs.55
so the additional interest he earned on F.D = Rs.55

The first year interest=550/2=275rs.

Rate of interest=55/275*100=20%

20% interest means the person received 20% of the amount he invested in the F.D.

Now clearly if in one fixed deposit his 20% of his investment= Rs.275,

So his total investment = 275/20*100=1375. Thus his total saving before investment=2*1375=2750 rs.

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

8. An amount is changed to Rs. 1800 in 5 years and to Rs. 1954 in 6 years. If the interest is calculated as a simple interest, then calculate the amount.

1350

1350

13.54%

1690

1690

14.62%

1030

1030

65.88%

1700

1700

5.96%

Simple interest for one year = (1954 - 1800) = 154.

Simple interest for 5 years = (154 x 5) = 770.

Principal amount = (1800 - 770) = 1030

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

9. An amount generated a simple interest of Rs. 5016.25 at the rate of 5 percent per annum rate in 4 years. Calculate the amount?

Rs. 32,097.5

Rs. 32,097.5

11.91%

Rs. 30,097.5

Rs. 30,097.5

70.51%

Rs. 33,097.5

Rs. 33,097.5

9.77%

Rs. 31,097.5

Rs. 31,097.5

7.81%

The amount is calculated as P(1 + RT)

Here P = ?, R = 5% Per Annum, T = 4 Years, S.I = 5016.25

S.I = \frac{P\times R\times T}{100}

5016.25 = \frac{P\times 5\times 4}{100}

\frac{5016.25\times 100}{20} = P

P = 25081.25

Now calculating the amount

A = P(1 + RT)

A = 25081.25\left ( 1 + \frac{5}{100}4\right )

on solving the above equation we get,

A = Rs. 30,097.5

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

Oops!

10. A person invested Rs.3500 on an interest rate of 6% per annum, Rs.1050 is obtained as interest in certain years. In order to earn Rs.1800 as interest on Rs.4500 in the same years what should be a rate of simple interest.

4.5%

4.5%

10%

8%

8%

73.33%

9.3%

9.3%

10.39%

5%

5%

6.27%

t= (SI×100) /PR

=>t = (1050×100)/(3500×6) = 5

Now, the rate of interest of rs. 1800 on rs. 4500 for 5 years be 'r'

So, r = (1800×100)/(4500×5) = 8%

Good Job! Did you know? : With $8.5 billion in their kitty, Wipro is the 4th largest Indian IT company in terms of revenue.

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Simple and Compound Interest Formulas
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