Simple Interest and Compound Interest Multiple Choice Questions and Answers:

**Ques.** A man borrows $4000 at 8% per annum on compound interest. At the end of every year, he pays $1500 as part payment of the loan and interest. How much does he still owe to the bank after 3 such annual payments?

(a) 1,799

(b) 169.25

(c) 2,000

(d) 234.13

**Ques.** If the amounts for a fixed principal after 3 and 2 years at a certain rate of compound interest are in the ratio 21 : 20. The rate of interest is

(a) 7%

(b) 6%

(c) 5%

(d) 4%

**Ques.** A man invested 1/3rd of the sum at 7%, 1/4th at 8% and the remaining at 10% for one year. If the annual interest is 408, then the investment is

(a) 8,400

(b) 4,800

(c) 5,000

(d) 7,200

**Ques.** Calculate the amount at 4480 at 8% per annum for 3 years.

(a) 5842.90

(b) 6000

(c) 5555.20

(d) 5600

**Ques.** Find the compound interest on 12000 for 3 years at 10% per annum compounded annually.

(a) 3972

(b) 3872

(c) 3772

(d) 3672

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**Ques.** The cost of a machine is estimated to be decreasing at the rate of 15% every year. If it costs 6,000 now, what will be the estimated value of the machine after 2 years?

(a) 3,750

(b) 4,335

(c) 3,225

(d) 5,000

**Ques.** Mr. Yogendra gave some money at simple interest and, at the end of 10 years, got back twice the sum. The rate percent per annum is:

(a) 2%

(b) 4%

(c) 5%

(d) 10%

**Ques.** The compound interest on 2500 at the rate of 6% p.a. after 2 years will be

(a) 309

(b) 318

(c) 320

(d) 322

**Ques.** What annual installment will discharge a depth of 2710 due in 4 years at 7% simple interest?

(a) 1000

(b) 225

(c) 500

(d) 150

**Ques.** Simple Interest on 1500 at 7% per annum for a certain time is 210. Find the time.

(a) 2 years

(b) 1.5 years

(c) 2.8 years

(d) 3 years

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**Ques.** Sarvesh borrowed 5,000 from Arun with simple interest. After 2 years, Arun got 1,000 more than what he had given to Sarvesh. What was the percentage of interest per annum?

(a) 10

(b) 20

(c) 15

(d) 5

**Ques.** If the compound interest on a certain sum of money for 2 ½ years at 5% per annum be 104.05, what would be the simple interest?

(a) 215.75

(b) 125.75

(c) 100

(d) 225

**Ques.** What annual installment will discharge a depth of 2710 due in 4 years at 7% simple interest?

(a) 1000

(b) 225

(c) 500

(d) 150

**Ques.** Find the compound interest on 6400 for 2 years, compounded annually at 7.5% per annum.

(a) 1000

(b) 996

(c) 1006

(d) None of these

**Ques.** A certain sum of money at simple interest amounts to 1260 in 2 years and to 1350 in 5 years. The rate percent per annum is ___

(a) 2 years

(b) 2.5 years

(c) 3 years

(d) 3.5 years

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**Ques.** Sarvesh borrowed 5,000 from Arun with simple interest. After 2 years, Arun got 1,000 more than what he had given to Sarvesh. What was the percentage of interest per annum?

(a) 10

(b) 20

(c) 15

(d) 5

**Ques.** A sum of money doubles itself at compound interest in 15 years. It will become 8 times in

(a) 40 years

(b) 30 years

(c) 60 years

(d) 45 years

**Ques.** A certain sum lent out at simple interest and the true discount on a certain sum for 1 year at 5% is 1 find the sum.

(a) 400

(b) 420

(c) 450

(d) 500

**Ques.** If the compound interest on a certain sum of money for 2 ½ years at 5% per annum be 104.05, what would be the simple interest?

(a) 215.75

(b) 125.75

(c) 100

(d) 225

**Ques.** Abhinav invested 1/3 of his capital at 7%, 1/4 at 8% and the remainder at 10%. If his annual income is 561, the capital is ___

(a) 5600

(b) 6200

(c) 6400

(d) 6600

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**Ques.** Ram borrowed 5,000 from Sanjay with simple interest. After 2 years, Sanjay got 1,000 more than what he had given to Ram. What was the percentage of interest per annum?

(a) 10

(b) 20

(c) 15

(d) 5

**Ques.** Find the compound interest on 8000 for 3 years at 5% per annum.

(a) 1451

(b) 1381

(c) 1261

(d) 1151

**Ques.** At what rate per annum will a sum of 2000 amount to 2205 in 2 years, compounded annually?

(a) 5%

(b) 10%

(c) 15%

(d) None of these

**Ques.** At what rate per annum will a sum of 3,600 become 4,500 in 10 years at simple interest?

(a) 5%

(b) 2.5%

(c) 10%

(d) 6.75%

**Ques.** The difference between the compound and the simple interest on a certain sum at 7½% per annum for 3 years is 110.70. Find the sum:

(a) 6400

(b) 1200

(c) 320050

(d) 2400

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**Ques.** Find the sum of money which increases 1/10 of itself every year and amounts to 450 in 5 years at S.I ___

(a) 250

(b) 300

(c) 350

(d) 400

**Ques.** Mathew bought a microwave for 4000 on credit. The rate of interest for the first year is 5% and for the second year is 15%. How much will it cost him if he pays the amount after two years?

(a) 4950

(b) 4830

(c) 4620

(d) 4240

**Ques.** A sum doubles in 20 years at simple interest. How much is the rate per annum?

(a) 5%

(b) 4%

(c) 12%

(d) 18%

**Ques.** Find the compound interest on 8000 for 3 years at 5% per annum.

(a) 1451

(b) 1381

(c) 1261

(d) 1151

**Ques.** If the amounts for a fixed principal after 3 and 2 years at a certain rate of compound interest are in the ratio 21 : 20. The rate of interest is

(a) 7%

(b) 6%

(c) 5%

(d) 4%

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**Ques.** A sum was put at simple interest at a certain rate for 2 years. Had it been put at 1% higher rate, it would have fetched 24 more. Find the sum.

(a) 1200

(b) 1600

(c) 2000

(d) 2400

**Ques.** The difference between the compound and the simple interest on a certain sum at 7½% per annum for 3 years is 110.70. Find the sum:

(a) 6400

(b) 1200

(c) 3200

(d) 5000

**Ques.** The simple interest on a sum of money is 19th of the principal and the number of years is equal to the rate of percent per annum. The rate of interest per annum is __

(a) 2%

(b) 5%

(c) 4%

(d) 3 1/3%

**Ques.** The sum fetched a total simple interest of 4016.25 at the rate of 9 p.c.p.a. in 5 years. What is the sum?

(a) 8925

(b) 8259

(c) 8529

(d) 8952

**Ques.** The difference in simple interest between 13% and 12% p.a. for a sum in one year is 110. Then the sum is

(a) 13,000

(b) 15,000

(c) 10,000

(d) 11,000

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**Ques.** The present population of a town is 25000. It grows at the rate of 4%, 5% and 8% during the first year, second year and third year respectively. Find its population after 3 years.

(a) 29484

(b) 29844

(c) 24984

(d) 29848

**Ques.** The simple interest on a certain sum of money for 4 years at 4 percent per annum exceeds the compound interest on the same sum for 3 years at 5 percent per annum by 57. Find the sum.

(a) 24,000

(b) 12,500

(c) 26,700

(d) 23,050

**Ques.** A sum of 1600 lent at simple interest at 12.5% per annum will become double in

(a) 6 years

(b) 7.5 years

(c) 8 years

(d) 9 1/4 years

**Ques.** Find compound interest of 5,000 at 10% per annum for 3 years

(a) 1,655

(b) 1,659

(c) 1,667

(d) 1,648

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**Ques.** The value of a mobile phone which was purchased 2 years ago depreciates at 12% p.a.. If its present value is 9680, for how much was it purchased?

(a) 10000

(b) 12000

(c) 11500

(d) 12500

**Ques.** At what rate per annum simple interest will a sum of money triple itself in 25 years?

(a) 8

(b) 8.5

(c) 9.5

(d) 10

**Ques.** If the compound interest on a certain sum for 3 years at 20% per annum is $728, find the simple interest.

(a) 575

(b) 600

(c) 620

(d) 675

**Ques.** A sum of 500/- was lent for two years at 2% compound interest. The interest for two years will be:

(a) 20.00

(b) 25.00

(c) 50.20

(d) 20.20

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**Ques.** A man invested 1/3rd of the sum at 7%, 1/4th at 8% and the remaining at 10% for one year. If the annual interest is 408, then the investment is

(a) 8,400

(b) 4,800

(c) 5,000

(d) 7,200

**Ques.** The difference in the interest received from two different banks on $1000 for 2 years is 20. Thus, the difference in their rates is

(a) 2%

(b) 1%

(c) 1.5%

(d) 0.5%

**Ques.** The difference between the compound interest and the simple interest on a certain sum at 10% per annum for two years is $60. Find the sum.

(a) $6,200

(b) $6,000

(c) $6,400

(d) $7,000

**Ques.** Find the simple interest and the amount of $2400 for 3 years 5 months and 15 days at the rate of 9%.

(a) 3451

(b) 3284

(c) 3147

(d) 3985

**Ques.** The difference in simple interest at 13% and 12% p.a. of a sum in one year is 110. Then the sum is

(a) 13,000

(b) 15,000

(c) 10,000

(d) 11,000

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**Ques.** At what rate per annum will a sum of $3,600 become $4,500 in 10 years at simple interest?

(a) 5%

(b) 2.5%

(c) 10%

(d) 6.75%

**Ques.** What sum of money lent out at compound interest will amount to $968 in 2 years at 10% per annum, interest being charged annually?

(a) 900

(b) 825

(c) 780

(d) 800

**Ques.** The difference in simple interest on a certain sum of money for 3 years and 5 years at 18% per annum is $2160. Then the sum is

(a) 6,500

(b) 4,500

(c) 6,000

(d) 7,500

**Ques.** A merchant borrowed $2500 from the money lenders. For one loan, he paid 12% per annum and for the other 14% per annum. The total interest paid for one year was $326. How much did he borrow at each rate?

(a) 1200 and 1300

(b) 1130 and 1175

(c) 225 and 350

(d) 325 and 370

**Ques.** The difference between compound interest and simple interest on a certain sum of money in 2 years at 4% per annum is 50. Find the sum

(a) 30,550

(b) 31,250

(c) 25,670

(d) 35,400

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**Ques.** Find the amount of 12000 after 2 years compounded annually, the rate of interest being 5% p.a. during the first year and 6% p.a. during the second year. Also find the compound interest.

(a) 1653

(b) 1536

(c) 1356

(d) 1386

**Ques.** In what time will 1000 amount to 1331 at 10% per annum, compounded annually?

(a) ½ years

(b) 1 ½ years

(c) 2/3 years

(d) 3 years

**Ques.** Find out the capital required to earn a monthly interest of 600 at 6% simple interest.

(a) 100000

(b) 120000

(c) 110000

(d) 130000

**Ques.** A sum of money lent at compound interest amounts to 1210 in two years and to 1464.10 in 4 years. Find the rate of interest.

(a) 12%

(b) 15%

(c) 10%

(d) 8%

**Ques.** A sum was put at simple interest at a certain rate for 2 years. Had it been put at a 3% higher rate, it would have fetched 72 more find the sum:

(a) 1000

(b) 1200

(c) 1500

(d) 1800

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**Ques.** Simple interest on a certain amount is 9/16 of the principal. If the number representing the rate of interest in percent and time in years are equal, then the time for which the principal is lent out, is:

(a) 5 ½ years

(b) 6 ½ years

(c) 7 years

(d) 7 ½ years

**How does simple interest work?**

Simple interest is a fixed rate of interest applied to the principal amount. Simple interest is calculated only on the original principal amount/quantity. Simply put, simple interests are calculated by taking the product of the principal amount and the rate x the time period.

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**How does compounding interest work?**

Compound interest is the process of calculating interest on the principal amount of a debt. It is the result of reinvesting the interest earned. The more you reinvest, the more you earn. It is also the fastest way to make money.

However, compounding interest isn’t always a good idea. Compounding is calculated each period based on the original principal plus any interest accrued in the previous period.

It’s good questions

Is this Vernon Dudley?

I am Ekramun Nahar Ani .My id 201-11-998. My comment is this chapter is Mathematics of Finance. I learn this lesson and some math korlam .After it is very easy topic in Business Mathematics. Then I learnt Compound interest ,Simple interest etc. Now I korlam Simple and compound interst quiz korasi. My Score is 58%. Thak you sir .