**Simple and Compound Interest Practice Questions for Quantitative Techniques**

Simple and Compound Interest Practice Questions for Quantitative Techniques

Question 1: If Sneha invests some sum of money lets say P in Equity market which amounts to Rs. 990 in 2.5yrs with Simple Interest while it amounts to Rs. 1044 in 4 yrs. Answer the following questions based on the above data.

What is the rate of interest?

a) 4% b) 6% c) 3% d) 5%

What is the Principal amount that was invested?

Rs. 950 b) Rs. 900 c) Rs. 930 d) Rs. 980

In how many years the amount will double itself with Simple Interest at 8%?

12.5 yrs b) 10 yrs c) 9.09 yrs d) 11.11 yrs

If the interest was compounded instead of simple Interest, then how much Sneha would have earned in 3 yrs? Use R as of 1st part of this question.

Rs.1008 b) Rs.1067 c) Rs. 1012 d) Rs. 1030

If the rate of compounding increased by 10% after 3 years and two-year compounding is done, what is the amount after 5 years?

Rs. 1055 b) Rs.1045 c)Rs.1032 d) Rs.1152

Question 2: Varun borrowed a total sum of Rs. 250,000 from 2 money lenders. For one loan, he paid interest at 7.5% per annum and the other loan at 10% per annum. The interest calculation is based on Simple Interest concept.

If the Total interest paid is 9.35%, What is the interest paid in the 1st year?

Rs.26730 b) Rs. 23375 c) Rs. 24450 d) Rs. 25750

If the borrowed sum is in the ratio of 3:2, then what is loan amount from 2nd lender?

Rs. 100000 b) Rs. 150000 c) Rs. 10000 d) Rs. 15000

What is the interest amount to pay for 1st loan with 7.5% in one year?

Rs. 11000 b) Rs. 15000 c) Rs. 11250 d) Rs. 10250

How many years it would take to pay triple the loan amount?

22 yrs b) 10.695 yrs c) 20.5 yrs d) 21.39 yrs

What is the total amount he is paying every year if the period to loan repay is 10yrs?

Rs. 48375 b) Rs. 45000 c) 50112 d) Rs. 47000

Solution and Answers

Ans: a) 4%

Sol: 990 = P( R * 2.5 / 100 + 1) … eq(1)

1044 = P (R * 4 / 100 +1) … eq(2)

Dividing eq(2) by eq(1), we get

1044/990 = (R/25 +1)40/25(R/40+1)

On solving the above equation we get R=4%

Ans: b) Rs. 900

Sol: Using the equation from the previous question, substituting R=4%, we get P = 900

Ans: a) 12.5yrs

Sol: The formula for doubling the amount will be used here,

R= 8%; T = 100/8 = 12.5yrs

Ans: c) Rs. 1012

Sol: Amount = P(1+R/100)T

A = 900(1+4/100)3 = 1012.37

Ans: d) Rs. 1152

Sol: Rate of Interest increased by 10% after 3 yrs, hnce new R= 4%*1.1 = 4.4%

Amount = 900(1+4/100)3(1+4.4/100)2 (using the formula for different rate of interest.

= 1151.97

Ans: b) Rs. 23375

Sol: P =Rs. 250000; Annual R for both loans combined= 9.35%

Interest = PR*1/100 = 250000*9.35/100 = Rs. 23375

Ans: a) Rs. 100000

Sol: Ratio of the loan amount is 3:2 for two lenders hence second loan amount would be 2/5 part of Total loan i.e., 250000*2/5 = Rs. 100000

Ans: c) Rs. 11250

Sol: As the loan from the first lender was Rs. 250000*3/5 = Rs. 150000

Interest for the first loan for 1 year = PR*1/100 = 150000*7.5/100 = Rs. 11250

Ans: d) 21.39 yrs

Sol: The formula for tripling the amount will be used here,

R= 9.35%; T = 200/9.35 = 21.39 yrs

Ans: a) 48375

Sol: Amount = 250000(9.35*10/100 + 1 ) = Rs. 483750

Yearly payment = 483750/10 = Rs. 48375

Read the theory on Simple and Compound Interest here.

Read our other posts on Quantitative Techniques Question Pattern and Test Papers.

Click here to learn about Quantitative Techniques Question Pattern from official CLAT website.