Simple & Compound Interest – PRACTICE QUESTIONS

By: Subhash Vaddepally

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01. A man borrowed Rs.40000 at 8% simple interest per year. At the end of second year, he paid back certain amount and at the end
of fifth year, he paid back Rs.35960 and cleared the debt. What is the amount did he pay back after the second year?
a. Rs.16200 b. Rs.17400 c. Rs.18600 d. None of these
02. A sum of Rs.24000 is borrowed for1½ yrs at the rate of interest 10% per annum compound semi-annually. What is the compound
interest (x) ?
a. x < Rs.3000 b. Rs.3000 < x < Rs.4000 c. Rs.4000 < x < Rs.5000 d. x > Rs.5000
03. An amount at compound interest doubles itself in 4 years. In how many years will it become 8 times of itself?
a. 8 years b. 12 years c. 16 years d. 24 years
04. At what rate per cent annum calculated in simple interest will a sum of money double in 10 years ?
a. 10% b. 2% c. 12.5% d. 13.5%
05. A man invested Rs.1000 on a simple interest at a certain rate and Rs.1500 at 2% higher rate. The total interest in three years is
Rs.390. What is the rate of interest for Rs.1000?
a. 4% b. 5% c. 6% d. 8%
06. If P is principal amount and the rate of interest is R% per annum and the compound interest is calculated k times ina year, then
what is the amount at the end of n years ?
𝑛 𝑛
𝑟 𝑛𝑘 𝑘𝑟 𝑛𝑘 𝑘𝑟 𝑘𝑟
𝑘 𝑘
a. 𝑝 (1 + ) b. 𝑝 (1 + ) c. 𝑝 (1 + ) d. 𝑝 (1 + )
100𝑘 100 100 100𝑘
07. Ram had Rs.2 lakh, part of which he lent at 15% per annum and rest at 12% per annum. Yearly interest accrued wasRs.27600.
How much did he lent at 15%?
a. Rs.1,20,000 b. Rs.1,00,000 c. Rs.80,000 d. Rs.60,000
08. Out of a sum of Rs.640, a part was lent at 6% simple interest and the other at 9% simple interest. If the interest on the first part
after 3 years equal to the interest on the second part after 6 years, then what is the second part ?
a. Rs.120 b. Rs.140 c. Rs.160 d. Rs.180
09. An amount of Rs.x at compound interest at 20% per annum for 3 years becomes y. What is y :x ?
a. 3 : 1 b. 36 : 25 c. 216 : 125 d. 125 : 216
10. At what rate per cent per annum simple interest, will a sum of money triple itself in 25 years ?
a. 8% b. 9% c. 10% d. 12%
11. The compound interest on a sum for 2 years is Rs.832 and the simple interest on the same sum at the same rate for the same
period is Rs.800. What is the rate of interest?
a. 6% b. 8% c. 10% d. 12%
12. If the rate of interest is 10% per annum and is compound half-yearly, then the principle of Rs.400 in 3/2 years will amount to
a.Rs.463.00 b.Rs.463.05 c.Rs.463.15 d.Rs.463.20
13. A person borrowed Rs.7500 at 16% compound interest. How much does he have to pay at the end of 2 years to clear the loan ?
a.Rs.9,900 b.Rs.10,092 c.Rs.11,000 d.Rs.11,052
14. The 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. What is the sum placed on simple interest?
a. Rs.1,550 b. Rs.1,650 c. Rs.1,750 d. Rs.2,000
15. A person invested some amount at the rate of 12% simple interest and the remaining at 10%. He received yearly an interest of
Rs.130. Had he interchanged the amounts invested, he would have received an interest of Rs.134. How much money did he
invest at different rates?
a. Rs.500 at the rate of 10%, Rs.800 at the rate of 12% b. Rs.700 at the rate of 10%, Rs.600 at the rate of 12%
c. Rs.800 at the rate of 10%, Rs.400 at the rate of 12% d. Rs.700 at the rate of 10%, Rs.500 at the rate of 12%
16. A sum of money lent on simple interest triples itself in 15years and 6 months. In how many year still it be doubled?
a. 5 years and 3 months b. 7 years and 9 months
c. 8 years and 3 months d. 9 years and 6 months
17. What is the least number of years in which a sum of money at 20% compound interest will be more than doubled ?
a. 7 b. 6 c. 5 d. 4
18. A sum of money on compound interest amount to Rs.9,680 in 2 years and to Rs.10,648 in 3 years. What is the rate of interest ?
a. 5% b. 10% c. 15% d. 20%
19. The sum which amounts to Rs.364.80 in 8 years at 3.5% simple interest per annum is …
a. Rs.285 b. Rs.280 c. Rs.275 d. Rs.270
20. A certain sum at simple interest amounts to Rs.1,350 in 5years and to Rs.1,620 in 8 years. What is the sum?
a. Rs.700 b. Rs.800 c. Rs.900 d. Rs.1,000
21. What is the compound interest on Rs.1600 at 25% per annum of 2 years compounded annually?
a. Rs.700 b. Rs.750 c. Rs.800 d. Rs.900
2
22. The principal on which a simple interest of Rs.55 will be obtained after 9 months at the rate of 3 % per annum is …
3
a. Rs.1,000 b. Rs.1,500 c. Rs.2,000 d. Rs.2,500
23. A sum of money becomes 3 times in 5 years. In how many years will the same sum become 6 times at the same rate of simple
interest ?
a. 15 years b. 12.5 years c. 10 years d. 7.5 years
24. The difference between compound interest and simple interest for 2 yr at the rate of 10% over principal amount of Rs.X is Rs.10.
What is the value of X?
a. Rs.100 b. Rs.1,000 c. Rs.500 d. Rs.5,000
25. A sum of money becomes 3 times in 5 yr at simple interest. In how many years, will the same sum become6 times at the same
rate of simple interest ?
a. 10 yr b. 12yr c. 12.5 yr d. 10.5 yr
26. The difference between compound interest and simple interest at the same rate of interest R per cent per annum on Rs.15,000
for 2 years is Rs.96.What is the value of R?
a. 8 b. 10 c. 12 d. Cannot be determined
27. There is 60% increase in an amount in 6 years at simple interest. What will be the compound interest on Rs.12,000 after 3 years
at the same rate of interest?
a. Rs.2,160 b. Rs.3,120 c. Rs.3,972 d. Rs.6,240
28. In how much time would the simple interest on a principal amount be 0.125 time the principal amount at 10% per annum?
1 3 1 3
a. 1 yr b. 1 yr c. 2 yr d. 2 yr
4 4 4 4
29. An automobile financer claims to be lending money at simple interest, but he includes the interest every six months for calculating
the principal. If he is charging an interest at the rate of 10%, the effective rate of interest becomes
a. 10.25% b. 10.5% c. 10.75% d. 11%
30. A sum of money invested at 20% per annum simple interest amounts to Rs.650 in 1 ½ year. What will it amounts to in 2 years at
12% per annum simple interest ?
a. Rs.250 b. Rs.500 c. Rs.620 d. Rs.600
31. At what rate a sum of Rs.16000 amount to Rs.16900 in 2 ½ years.
1 3
a. 22 % b. 2 ¼ % c. % d. 3 ¼ %
3 4
32. Rs.100 was divided in two parts and lent at 5% pa for 2 years. If 9 times the interest on first part is equal to 16 times the interest
of the second part. Find the biggest part.
a.Rs.50 b. Rs.64 c. Rs.36 d. Rs.60
33. Two equal sums of money were lent at 10% for 3 ½ and 5 ½ years. If the interest earned in total is 1917 find the sum lent for 3 ½
years.
a. Rs.2130 b. Rs.4929 c. Rs.5320 d. Rs.3120
34. A certain sum becomes four times itself in 20 years. The rate of interest for it would be.
1
a.15% b. 20% c. 20 % d. 15 ½ %
3
35. A man lent Rs.3000 for 4 years and Rs.5000 for 7 years at a certain rate. If the total interest earned is 2820, find the rate of interest?
a.5% b. 5.2% c. 6% d. 8%
36. A man invested ⅓ of his capital at 10% pa, ¼ of his capital was invested at 8% pa and remaining at 6% pa. If his annual income on
investments is Rs.1880. Find his investment?
a. Rs.12000 b. Rs.18000 c. Rs.20000 d. Rs.24000
37. What is the compound interest on Rs.7200 at 4% pa for 2 years compounded annually?
a. Rs.938 b. Rs.738 c. Rs.538 d. None
38. Find the compound interest on Rs.15000 at 20% pa for 1 ½ year if the interest is compounded half yearly.
a. Rs.4965 b. Rs.5461 c. Rs.6007 d. Rs.9965
39. What is the interest on Rs.12000 at 8% pa for 6 months if the interest is compounded quarterly?
a. Rs.996.80 b. Rs.1996.80 c. Rs.484.80 d. None
40. A sum was put at simple interest at a certain rate for 3 years. Had it been put at 2% higher rate, it would have fetched Rs.360
more. Find the sum.
a. Rs.6000. b. Rs.7000. c. Rs.8000. d. Rs.9000.

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Key: 1. b 2. b 3. b 4. a 5. a 6. a 7. a 8. c 9. c 10. a 11. b 12. b 13. b 14. c

15. d 16. b 17. d 18. b 19. a 20. c 21. d 22. c 23. b 24. b 25. c 26. a 27. c 28. a
29. a 30. c 31. a 32. b 33. a 34. a 35. c 36. d 37. d 38. a 39. b 40. a
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