CDC Department

University

Simple & Compound Interest

SRM

1. Simple interest on an amount after 36 months at the rate of 3% per quarter is

720. The amount is
1) 4000

2) 2000

Exp: SI = PRT =720=

100

3) 6000

P 3
100

36
4

4) 4800

= P=2000

Note: R is 3% per quarter, so 36 months is 36/4.

2. An amount becomes 8,800 in four years at 15% p.a. What is that amount?
1) 5,500

2)7,500

3) 5,800

4) 6,400

Exp: Amount becomes 8800, So Principal+ SI=8800,

P+SI=

P=

P+

PRT
RT
4 15
3 8
=P 1+
=P 1+
=P 1+ = P=8800
100
100
100
5 5

) (

) ( )

8800 5
=5500
8

3. Amir took a loan of 900 at the rate of 12% per year for 8 months. How much does
he need to pay at the end of 8 months?
1) 952

2) 852

900 12
Exp: SI=

100

8
12

3) 872

4) 972

=72 (Time usually calculate per year, so 8 months= 8/12)

Amount paid= Principal+ SI= 900+72=972

4. The simple interest on a sum of money will be 900 after 3 years. In the next 3
years if principal is doubled, then what will be the total interest at the end of the 6 th
year?
1) 900

2) 1800

3) 2700

4) 3600

Exp: SI after 3 years 900. We know that SI always constant every year.
After 3rd year the principal is double. So, SI also doubles, then next 3 years
900*2=1800
Total after 6 years 900+1800=2700

CDC Department
University

Simple & Compound Interest

SRM

5. If 40000 is given as loan for a period of 3 years with interest rates 5%,
7% and 9% for the 1st, 2nd and 3rd years respectively, what is the total
amount that needs to be paid in the end?
1) 23500

2) 24200

3) 18000

4) 24000

Exp:
6. Ganesh borrowed some money at the rate of 5% p.a. for the first three years, 7%
p.a. for the next 5 years and 9% p.a. for the period beyond eight years. If the total
interest paid by him at the end of 14 years is 6240, how much money did he
borrow?
1) 6300

3) 6200

4) 6000

( P 1005 3 + P 71005 + P1009 6 )=6240

Exp:

2) 6180

15 35 54
6240 100
+
+
=6240= P=
=6000
( 100
100 100 )
104

7. A sum of money becomes 1120 in 4 years and 1360 in 7 years at SI. How much
money is deposited?
1) 900

2) 700

3) 800

4) 1200

Exp: We know that SI always constant every year

So, Difference 7year 4 year is 3 year= 1360-1120= 240 is SI of money in 3 years
Then SI for 1 year is 240/3= 80, for 4 years 4*80= 320
A sum of money becomes 1120 in 4 years, Principal = Amount SI= 1120-320=800
8. Arun borrows 1500 from two money lenders. He pays interest at the rate of 12%
per annum for one loan and at the rate of 14% pa for the other. How much does he
borrow at 12% pa if the total interest paid at the end of the year is 186?
1) 1200

2) 1125

3) 1250

4) 1800

Exp: Let assume two amounts is X at 12% and 1500-X at 14%.

SI =

12 X
100

and

SI =

Total interest is 186=

( 1500X ) 14
14 X
=210
100
100
12 X
100 +

210

14 X
100 =

2X
24 100
=24, X =
=1200
100
2

CDC Department
University

Simple & Compound Interest

SRM

9. A sum amounts to 3 times itself at SI in 5 years. In what time will it become 5

times itself?
1) 5 years

2) 15 years 3) 10 years

4) 7.5 years

Exp: Let Principal is P, then Amount =3P in 5 years. So, SI for 5 years is Amount-P=
3P-P=2P

Then 2P

P R 5
, Rate of interest is 40% per year.
100

So, 5 times means Amount=5P, then SI=4P

4 P=

Then,

P 40 T
, Time =10 years.
100

Short cut {based on SI only}: Let p=100, Amt=300 in 5 years so SI=200

100

SI=200, Amt=
300
5 years

SI= 400,
Amt=500
10 years

SI=600, Amt=
700
15 years

SI=800, Amt= 900

Principa
20 years
l
SI is constant value, so it doubles in 5 yr means, 4 times in next 5 yrs.
10. What will be the compound interest on 15000 for 2 years at 12% per annum?
1) 3604

Exp:

2) 3816

1+ R/100

CI =P

CI =15000(1+

3) 3836

4) 3800

and CI=Principal + Interest

12 2
112 2
) =15000(
) =18816
100
100

Then, Interest Amt = 18816-15000=3816

11. Compound interest on a certain amount for 2 years at the rate of 5% is 102.5.
Find the amount.
1) 500

2) 725

Exp: Interest= CI-P=>

P{(1+

3) 850

5 2
) 1 }=102.5
100

Simplify, P{(1.051.05)-1}=102.5 => P(1.1025-1)=102.5

4) 1000

CDC Department
University

Simple & Compound Interest

SRM

P=102.5/ 0.1025= 1000

12. An amount of 10000 is taken as loan by Ajmal at compound interest charging
8% p.a. for 1st year and 9% p.a. for the 2nd year. How much is the total to be paid
by Ajmal after 2 years?
1) 16000

2) 14772

3) 12000

4) 11772

108 109

Exp: CI Amount= 10000( 100 100 ) = 11772

13. A sum of 40000 is invested for 18 months at 20% p.a. on compound interest. If
the interest is compounded half yearly, what will be the interest to be paid?
1) 13240

2) 13080

3) 13530

4) 13540

)
R /2 2 n
20/ 2 2 ( 18
(1+
)
=40000(1+
) 12
Exp: CI Amt calculate half yearly = P
100
100

Amount= 53240, interest= 53240-40000= 13240.

14. Rohit has given a loan to Sohit an amount of 20000 at an interest rate 8 % p.a.
for a period of 30 months. If interest charged is at compound interest, how much
does Sohit need to pay in the end?
1) 23000
Exp:

2) 24000.36 3) 24261.12

20000

108 108 104

100 100 100

4) 25020.54

= 24261.12

(1+ 1008 )= 108

100

(Note:

For 6 months R= 8/2=4%.... so 104/100

15. A sum of money invested at CI amounts to 800 in 3 years, 882 in 5 years. Find
the rate of interest?
1) 2.5%
Exp:

Solve

2) 5%

3) 4%

4) 6.66%

R
R
P 1+
=800 1.P 1+
=882 2.
100
100

2 1

=>

1+

R
882 441 21
=
=
=
So , Cancel t h e squarebot h side .
100
800 400 20

( )

CDC Department
University

Simple & Compound Interest

SRM

100+ R 21
= solve R=5
100
20
16. On a given amount the compound interest at the end of first year was 81 and
the second year was 88.29. How much money was invested?
1) 900
Exp:

2) 996

P 1+

3) 880

4) Cannot be determined

R 1
R 2
=81 1.P 1+
=88.29 2.
100
100

solve R=9 per annum .

(1+ 100R )= 88.79
81

Solve 2 1 =>

P{ 1+

Interest on CI for 1 year =

9
1}=81
100

Solve P=Rs. 900

Note: These kinds of problems go with options
17. A sum of 5000 is invested for 3 years at 5% p.a. on compound interest.
Income Tax at the rate of 20% on the interest earned was deducted at the
end of each year. The amount at the end of 3rd year?
1) 5624.32 2) 5630.50

3) 5620.54

4) 5608.30

Exp:
Interest for 1 year
5% of 5000= 250
5% of 5200= 260
5% of 5208= 260.4
Amount= 5000+ 200+ 208

Tax
20% of 250=50
20% of 260=52
20% of 260.4=52.08
+ 208.32= 5616.32

Amount
250-50=200
260-52=208
260.4-52.08= 208.32

18. A sum of money doubles itself at CI in 9 years. In how many years will it become
16 times itself?
1) 18 years 2) 36 years
Exp:

3) 27 years 4) 45 years

R 9
R n
P 1+
=2 P 1, P 1+
=16 P 2
100
100

CDC Department
University

Solve 2 1=>

Simple & Compound Interest

1+

SRM

R n
R 9 16 24
1+
= =
100
100
2 2

) (

n
=4. So ,n=36 years .{Power values are equal }
9
Short cut {based on CI only}: Let P = 100, after 9 years 200. Final amount =
1600
100
Basic

200
9 years

400
18 years

800
27 years

1600
36 years

19. What is the difference between compound interest and simple interest for the
sum of 20000 over a 2 year period, if CI is calculated at 20% p.a. and SI is
calculated at 23% p.a.?
1) 200

2) 125

Exp: SI for 2 years,

CI for 2 years,

3) 250

20000

20000 1+

4) 400

23
2=9200
100
2

20
=28800. Interest is 8800
100

Diff is 9200-8800=400
20. If the difference between the simple interest and compound interest on some
amount at 10% pa for 3 years is 372, then what must be the principal amount?
1) 12400

2) 12000

3) 14800

4) 18000

Exp: Diff b/w CI & SI is PCIPSI=P((1+R/100)^n (1+nR/100))

10 3
3 10
(1+
) (1+
)} =
P{
100
100
P=372/0.031= 12000

P{(1.1)31.3 }=372= P(1.3311.3)=0.031 P=372