Simple and Compound Interest Aptitude Questions & Answers

Simple and Compound Interest – Practice Questions, Shortcuts, Important Formulas

Simple and Compound Interest

Principal: The money borrowed or lent out for a certain period is called the principal or the sum.
Interest: Extra money paid for using other’s money is called interest.
Simple Interest (SI): If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called simple interest.
Compound Interest: Interest added to the principal of a loan or deposit, so that the added interest also earns interest. This process is called compounding.

Important Formulas & Equations

If P = Principal, A = Amount, R = Rate percent per year, T = T years, S.I = Simple interest, C.I = Compound interest, Then,

Simple Interest

S.I = (P × R × T)/100
A = P + S.I

Compound Interest

When interest is compounded yearly,

When interest is compounded half-yearly,

When interest is compounded quarterly,

When time is in a fraction of a year, say 2⅕

If the rate of interest in 1st year, 2nd year …………..… nth year is R₁%, R₂% …………. R_n% respectively, then,

Simple Interest and Compound Interest Aptitude Questions

1.Mr. Thomas spent Rs. 13,900 divided into two separate schemes A and B at a simple rate of interest of 14 percent p.a. And p.a. 11 percent Accordingly. If Rs. 3508 is the sum of simple interest received in 2 years, what was the amount invested in Scheme B?

A. Rs. 6400
B. Rs. 6500
C. Rs. 7200
D. Rs. 7500

Answer: Option A (Rs. 6400)

2. How long will it take to yield Rs. 81 as interest at 4.5 percent per annum of simple interest for an amount of Rs. 450?

A. 3.5 years
B. 4 years
C. 4.5 years
D. 5 years

Answer: Option B (4 years)

3. A sum of Rs 12,500 at the rate of simple interest amounts to Rs 15,500 in 4 years. What is the interest rate?

A. 3%
B. 4%
C. 5%
D. 6%

Answer: Option D (6%)

4. A man took a loan at a rate of 12 percent p.a. from a bank. Simple interest. He was only expected to pay Rs. 5400 interest for the duration after three years. The principal sum which he borrowed was

A. Rs. 2000
B. Rs. 10,000
C. Rs. 15,000
D. Rs. 20,000

Answer: Option C (Rs. 15,000)

5. What is the ratio of simple interest earned for six years by a certain amount at the same interest rate, and that for nine years?

A. 1 : 3
B. 1: 4
C. 2 : 3
D. Data inadequate

Answer: Option C (2:3)

6. After seven years, a certain amount earns simple interest on Rs. 1750. Had the interest been 2 percent higher, how much more interest would it have earned?

A. Rs. 35
B. Rs. 245
C. Rs. 350
D. Cannot be determined

Answer: Option D (Cannot be determined)

7. Find out the C.I on Rs.5000 at 4% p.a. Compound half-yearly for 1 1/2 years.

A. Rs.420.20
B. Rs.319.06
C. Rs.306.04
D. Rs.294.75

Answer: Option C (Rs.306.04)

8. In a certain time, Rs.8000 becomes Rs.9261 at a rate of 5 percent per annum of C.I. Finding time?

A. 4 years
B. 6 years
C. 2 years
D. 3 years

Answer: Option D (3 years)

9. The difference between simple and compound returns, compounded annually at 4 percent per annum on a certain amount of money for two years, is Re. 1. The number (in Rs.) will be:

A. 625
B. 630
C. 640
D. 650

Answer: Option A (625)

10. A basic value, there is a rise of 60 percent in a sum in 6 years. What is Rs.12,000 compound interest going to be at the same rate after three years?

Simple and Compound Interest – Practice Questions, Shortcuts, Important Formulas