# Compound Interest Quiz 3

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# Compound Interest Quiz 3

### Introduction

What is compound interest? Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest. It is the result of reinvesting interest, rather than paying it out, so that interest in the next period is then earned on the principal sum plus previously accumulated interest.
Compound Interest is one of important topic in Quantitative Aptitude Section. In Compound Interest Quiz 3 article candidates can find questions with answer. By solving this questions candidates can improve and maintain, speed, and accuracy in the exams. Compound Interest Quiz 3 questions are very useful for different exams such as IBPS PO, Clerk, SSC CGL, SBI PO, NIACL Assistant, NICL AO, IBPS SO, RRB, Railways, Civil Services etc.

### Q1

A takes a loan of Rs. 8400 at 10% p.a. compounded annually which is to be repaid in two equal annual installments. One at the end of one year and the other at the end of the ${2}^{nd}$ year. The value of each installment is?
A. 4200 B. 4140 C. 4840 D. 5640

C
$8400 = x \times (\frac {210}{121}) \Rightarrow 4840$

### Q2

A sum of money lent at compound interest for 2 years at 20% per annum would fetch Rs.723 more, if the interest was payable half yearly than if it was payable annually. The sum is ____
A. Rs. 20000 B. Rs. 15000 C. Rs. 30000 D. Rs. 45000

C
C.I. compounded half yearly = $(\frac {4641}{10000})x$
C.I. compounded annually = $(\frac {11}{25})x$
$(\frac {4641}{10000})x – (\frac {11}{25})x = 723$
x = 30000

### Q3

Suresh borrows Rs.6375 to be paid back with compound interest at the rate of 4 % pa by the end of 2 year in two equal yearly installments. How much will each installment will be?
A. 3840 B. 3380 C. 4800 D. None of these

B
$\frac {25x}{26} + \frac {625}{676x} = 6375$
$x = \frac{(6375 \times 676)}{1275} = 3380$

### Q4

A sum of Rs. 8400 was taken as loan. This is to be paid in two equal annual installments. If the rate of interest be 20% compounded annually, then the value of each installment is
A. 5400 B. 5700 C. 5100 D. 5200

A
Let value of each installment be X.
$\frac {x}{1 + \frac {20}{100}} + \frac {x}{{(1 + \frac {20}{100})}^{2}} = 8400$
$\Rightarrow X(\frac {5}{6} + \frac {25}{36}) = 8400$
$\Rightarrow x\frac {56}{36} = 8400$
X = 5400

### Q5

If Rs. 7200 amounts to Rs.10368 at compound interest in a certain time , then Rs. 7200 amounts to what in half of the time?
A. 8640 B. 8600 C. 8800 D. 8520

A
Let rate = R% and time = n year
Then, $10368 = 7200(1 + \frac {R}{100})n$
$\Rightarrow (1 + \frac {R}{100})n = \frac {10368}{7200} = 1.44$
∴ $7200 (1 + \frac {R}{100})\frac {n}{2} = \sqrt {1.44} = 1.2$
∴ Required amount for $\frac {n}{2}$ yr
= $7200 (1 + \frac {R}{100})\frac {n}{2}$
= 7200 x 1.2 = Rs. 8640

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