Compound Interest
Compound Interest - Important Points
| 6. | Certain sum becomes 3 times it self at compound interest in 10 years. In how many years it becomes 9 times? |
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A. 25 years
B. 27 years
C. 30 years
D. 20 years
View Answer Discuss Work SpaceAnswer: option d
Explanation:
P(1 + R/100)^10 = 3P
=> P(1 + R/100)^10 = 3
Let P(1 + R/100)^n = 9P
=> (1 + R/100)^n = 9
=> 32 = [(1 + R/100)^10]^2
=> (1 + R/100)^n => (1 + R/100)^20
=> n = 20 Years.
| 7. | The least number of complete years in which a sum of money put at 20% compound interest will be more than doubled is: |
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A. 3
B. 2
C. 5
D. 4
View Answer Discuss Work SpaceAnswer: option d
Explanation:
P(1+R/100)^T >2P
=> (1 + 20/100)T > 2
=> (6/5)^T > 2
=> (1.2)^T > 2
Minimum integer value of T which satisfies the above equation is 4
That is, required number of years = 4
| 8. | A sum of money placed at compound interest doubles itself in 4 years. In how many years will it amount to 8 times? |
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A. 6 years
B. 10 years
C. 12 years
D. 8 years
View Answer Discuss Work SpaceAnswer: option c
Explanation:
Coming soon
| 9. | If a sum on compound interest becomes three times in 4 years, then with the same interest rate, the sum will become 81 times in: |
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A. 18 years
B. 12 years
C. 16 years
D. 14 years
View Answer Discuss Work SpaceAnswer: option c
Explanation:
Let the sum be P
Given, The sum P becomes 3P in 4 years on compound interest
=> 3P = P(1 + R/100)^4
=> 3 = (1 + R/100)^4
=> (3)^1/4 = (1 + R/100) ---Eq1
Let the sum P becomes 81P in n years
=> 81P = P(1 + R/100)^n
=> 81 = (1 + R/100)^n
=> (3)^4 = (1 + R/100)^n
=> (3)^4 = [(3)^1/4]^n From Eq1
=> 4 = n/4
=> n = 16
i.e, the sum will become 81 times in 16 years
| 10. | Amit borrowed a certain sum from Babu at a certain rate of simple interest for 2 years. He lent this sum to Charan at the same rate of interest compounded annually for the same period. At the end of two years, he received Rs. 2400 as compound interest but paid Rs. 2000 only as simple interest. Find the rate of interest. |
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A. 40%
B. 30%
C. 20%
D. 10%
View Answer Discuss Work SpaceAnswer: option a
Explanation:
Let the sum be x
Simple interest on x for 2 years = Rs. 2000
Simple Interest = (P *R*T) / 100
2000 = x * R * 2 / 100
=> x R =100000 ---- (1)
Compound Interest on x for 2 years = 2400
P( 1 + R / 100 ) ^ T - P = 2400
=> x ( 1+ R / 100 ) ^ 2 - x = 2400
=> x ( 1 + 2R / 100 + R ^ 2 / 10000)- x = 2400
=> x ( 2R / 100 + R ^ 2 /10000 ) = 2400
=> 2 x R / 100 +x R ^ 2 /10000 ) = 2400 -----(2)
Substituting the value of xR from (1) in (2) ,we get
=> 2 * (100000 / 100) + 100000 * (R /10000) = 2400
=>2000 + 10 R = 2400
=> 10 R = 2400 - 2000
=> 10 R = 400
=> R = 400 / 10
=> R = 40 %.
Compound Interest Questions and Answers FAQ
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