Simple & Compound Interest

Ladakh Prison Department · Mathematics · 49 practice questions with answers and explanations: 21 Easy, 27 Medium, 1 Hard.

Sample questions

Sample Easy question 1

At what rate of simple interest per annum will Rs. 4000 amount to Rs. 5280 in 4 years?

  1. 10%
  2. 8%
  3. 7%
  4. 9%
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Answer: B. Simple interest = 5280 − 4000 = Rs. 1280. Rate = (1280 × 100) ÷ (4000 × 4) = 8%.

Sample Easy question 2

At what rate of simple interest per annum will Rs. 12000 amount to Rs. 14400 in 4 years?

  1. 4%
  2. 5%
  3. 7%
  4. 6%
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Answer: B. Simple interest = 14400 − 12000 = Rs. 2400. Rate = (2400 × 100) ÷ (12000 × 4) = 5%.

Sample Easy question 3

At what rate of simple interest per annum will Rs. 8000 amount to Rs. 8960 in 2 years?

  1. 6%
  2. 8%
  3. 7%
  4. 5%
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Answer: A. Simple interest = 8960 − 8000 = Rs. 960. Rate = (960 × 100) ÷ (8000 × 2) = 6%.

Sample Medium question 4

A sum of money invested at compound interest amounts to Rs. 4840 in 2 years and Rs. 5324 in 3 years. Find the rate of interest.

  1. 10%
  2. 12%
  3. 9%
  4. 8%
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Answer: A. The interest earned in the 3rd year = 5324-4840 = 484, which is the interest on Rs. 4840 for 1 year. Rate = (484×100)/4840 = 10%.

Sample Medium question 5

A sum triples itself in 15 years at a certain rate of simple interest. In how many years will it become 5 times itself at the same rate?

  1. 25 years
  2. 30 years
  3. 28 years
  4. 32 years
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Answer: B. Tripling means SI=2P in 15 years, so rate = 200/15 % per year. For 5 times, SI=4P: Time = (4P×100)/(P×(200/15)) = 400×15/200 = 30 years.

Sample Medium question 6

The difference between the compound interest (compounded annually) and the simple interest on a certain sum for 2 years at 10% per annum is Rs. 25. Find the sum.

  1. Rs. 1250
  2. Rs. 5000
  3. Rs. 3500
  4. Rs. 2500
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Answer: D. For 2 years, CI − SI = P × (r/100)². So P = 25 × (100/10)² = Rs. 2500.

Sample Hard question 7

Find the compound interest on Rs. 10,000 for 1.5 years at 10% per annum, compounded half-yearly.

  1. 1600
  2. 1576.25
  3. 1500
  4. 1550
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Answer: B. With 5% per half-year over 3 periods, amount = 10000 × 1.05³ ≈ 11576.25, so CI ≈ 1576.25.

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