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Buffet 51
Quantitative Aptitude
SIMPLE & COMPOUND INTEREST
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SIMPLE & COMPOUND INTEREST

principal and on earned interest. In simple

I. Simple Interest (SI) :

words, it is called as Interest of interests.

Definition:-If the interest on a sum

CI allows your investment to grow even

borrowed for certain period is reckoned

more than if you were paid only simple

uniformly, then it is called Simple interest.

interest.

Principal: - The money borrowed or lent out

So, Amount at the end of 1st year (or

for certain period is called the principal or

Period) will become the principal for the 2nd

the Sum.

year (or Period) and Amount at the end of

Interest: - Extra money paid for using other

2nd year (or Period) becomes the Principal of

money is called interest.

the 3rd year.

Formula:-

Let Principal = P, Rate = r % per annum

Points to remember:-

(p.a.) , and Time = n years then,

CI is always greater than SI.

But, for 1st year Simple interest and

Using this formula we can also find out,

Formulae:-

i) Amount = Principal + Interest

Compound interest both are equal.

Where,
A= Amount,

Shortcut:-

Calculate the overall rate % for SI by

multiplying r with t
For Ex: If P=1500, n=3 years, r=10%
Then the overall R=30%. Therefore 30% of
1500 is the answer, which is

P= Principal,
r= Rate %,
n= no. of years. Then,
ii) Compound Interest (CI) =

Rs. 450/-

II. Compound Interest:

Definition:-When compound interest is

:-

applied, interest is paid on both the original

Here the shortcut for calculating the overall

Shortcut (Pascals Triangle Method)

R% is using

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For Ex:- if P=15000, n=2 years, r=10%.

Difference between Compound Interest

Then,

& Simple interest Concept,

Overall R%=112=121. Here Leave the 100th

(a) For 2 Years,

digit,
Take, Tens digit first, (i.e) .,
2 (10% of 15000) =2 1500=3000,

(b) For 3 Years,

Now, Ones digit

1*(10% of 1500) = 1*150=150.

If CI & SI on a certain rate (r) on the same

Therefore, CI=3000+150= Rs. 3150/-

Principal (P) for 2 years is given, then the

rate of interest can be determined using the

Conditions on CI:-

following formula,

1.When interest is compounded annually,

Amount =
2.When interest is compounded half yearly,

Practice Problems:
1. A sum of money at simple interest

Amount =
3. When interest is compounded Quarterly,
Amount =
4. When interest is compounded annually
but time is in fraction, say 3(2/5) year

amounts to Rs. 815 in 3 years and to Rs.

854 in 4 years. The sum is:
A) Rs. 720

B) Rs. 698

C) Rs. 678

D) Rs. 696

E) none of these

2. A sum fetched a total simple interest of

Amount =

Rs. 4016.25 at the rate of 9 % p.a. in 5

5. When Rates are different for different

years. What is the sum?

years, say r 1%, r 2%, and r 3% for 1st, 2nd

A) Rs. 8045

B) Rs. 8925 C) Rs. 8900

and 3rd year respectively.

D) Rs. 8032.45

E) none of these

Then, Amount =

3. A sum of money amounts to Rs. 9800

after 5 years and Rs. 12005 after 8 years at
the same rate of simple interest. The rate of

6. Present worth of Rs. X due n years

interest per annum is:

hence is given by:

A) 12 %

B) 13 %

D) 12.5 %

E) 10%

C) 8 %

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4. A person borrows Rs. 5000 for 2 years at

2200 in all from both of them as interest.

4% p.a. simple interest. He immediately

The rate of interest per annum is:

lends it to another person at 6.25% p.a. for

A) 5 %

B) 7%

2 years. Find his gain in the transaction per

D) 12%

E) 15%

year.

9.A bank offers 5% compound interest

A) Rs. 112.50

B) Rs. 175

C) Rs. 150

D) Rs. 125.50

E) Rs. 220.50

C) 10 %

calculated on half-yearly basis. A customer

deposits Rs. 1600 each on 1st January and

5. A man took loan from a bank at the rate

1st July of a year. At the end of the year, the

of 12% p.a. simple interest. After 3 years he

amount he would have gained by way of

had to pay Rs. 5400 interest only for the

interest is:

period. The principal amount borrowed by

A) 123

B) 122

him was:

D) 120

E) 119

C) 121

A) Rs. 12000

B) Rs.15000

10.The compound interest on Rs. 30, 000 at

C) Rs. 12500

D) Rs. 22000

7% per annum is Rs. 4347. The period (in

E) Rs.11500

years) is:

6. How much time will it take for an amount

A) 2.5

of Rs. 450 to yield Rs. 81 as interest at 4.5%

D) 4

per annum of simple interest?

11. At what rate of compound interest per

A) 3 years

B) 4 years

annum will a sum of Rs. 1200 become Rs.

D) 6 years

E) 7 years.

C) 5 years

B) 2

C) 3

E) none of these

1348.32 in 2 years?

7. Bhavika took a loan of Rs. 1200 with

A) 8 %

B) 9%

simple interest for as many years as the rate

D) 8.5 %

E) none of these

of interest. If she paid Rs. 432 as interest at

12.The difference between simple interest

the end of the loan period, what was the rate

and compound on Rs. 1200 for one year at

of interest?

10% per annum reckoned half-yearly is:

A) 3.6

B) 5

D) 25

E) 18

C) 6

C) 6 %

A) Rs. 3

B) Rs. 4

C) Rs. 3.5

D) Rs. 7.5

E) none of these

8. A lent Rs. 5000 to B for 2 years and Rs.

13.The least number of complete years in

3000 to C for 4 years on simple interest at

which a sum of money put out at 20%

the same rate of interest and received Rs.

compound interest will be more than doubled

is:

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A) 4

B) 5

C) 6

D) 2.5

more than doubled.

E) none of these

a) 2 years

b) 3 years

c) 4 years

14.What will be the compound interest on a

d) 5 years

e) None of these.

sum of Rs. 25, 000 after 3 years at the rate

19.A sum of rupees 4420 is to be divided

of 12 p.c.p.a.?

between rakesh and prakash in such a way

A) Rs.10123.20

B) Rs. 9000

that after 5 years and 7 years respectively

C) Rs. 12000

D) Rs. 10163.34

the amount they get is equal. The rate of

E) none of these

interest is 10 percent. Find the share of

15.Simple interest on a certain sum of

rakesh and prakash

money for 3 years at 8% per annum is half

a) 2000, 2420

b) 2420, 2000

the compound interest on Rs. 4000 for 2

c) 2480, 2420

d) 2210, 2210

years at 10% per annum. The sum placed on

e) None of these

simple interest is:

20.The simple interest on a certain sum of

A) Rs. 1650 B) Rs. 2000 C) Rs. 1750

money for 4 years at 15 percent per annum

D) Rs.1550 E) none of these

is 600. Find the compound interest in the

16.The difference between compound

same sum at 10 percent interest for 2 years

interest compounded every 6 months and

a) 220

b) 200

simple interest after 2 years is 248.10. The

d) 120

e) None of these

rate of interest is 10 percent. Find the sum

21. Find the effective annual rate of 10

a) 12000

b) 14000

percent per annum compounded half-

d) 18000

e) None of these

c) 16000

c) 210

yearly-

17.A person earns an interest of 240 on

a) 10.5

b) 10.25

investing certain amount at Simple interest

d) 11.50

e) None of these.

for 2 years at 5 percent amount. If the rate

22.A sum of rupees 3200 is compounded

of interest is compounded annually then how

annually at the rate of 25 paise per rupee

much more interest will be gain by the

per annum. Find the compound interest

person at same rate of interest and on the

payable after 2 years.

same sum.

a) 1200

b) 1600

d) 2000

e) None of these.

a) 6

b) 8

c) 12 d) 10 e) None of these.

c) 11.25

c) 1800

18.Find the least number of years in which

23. A sum of 3000 becomes 3600 in 3 years

the sum put at 25% rate of interest will be

at 15 percent per annum. What will be the

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sum at the same rate after 9 years.

that each annual payment is made at the

a) 5124

B) 5184

end of the year.

D) 5192

E) None of these.

a) 3600

B) 3500

24.Priya saves an amount of 500 every year

D) 3400

E) 3250

and then lent that amount at an interest of

29. A person took a loan of Rs 6000 for 3

10 percent compounded annually. Find the

years, at 5% per annum compound interest.

amount after 3 years.

He repaid Rs 2100 in each of the first 2

C) 5186

a) 1820.5

B) 1840.5

C) 1920.5

D) 1940.5

E) None of these

C) 3450

years.The amount he should pay at the end

of third year to clear all his debts is.

25.A man borrows 10000 rupees at 20 %

a) 2425.5

B) 2552.5

compound interest for 3 years. If every year

D) 2745.5

E) 2541.5

he pays 2000 rupees as repayment. How

30. If the difference between simple interest

much amount is still left to be paid by the

and compound interest on a certain sum of

man?

money for 3 years at 10% per annum is Rs

a) 5000

B) 7000

C) 9000

D) 10000

E) None of these

C) 2635.5

31, The sum is.

a) 500

B) 75

26.The simple and compound interests on a

D) 1250

E) 1500

sum of money for two years are Rs 2880 and

31.The simple interest on a sum of money

Rs 3052.80 respectively. The Rate of interest

will be rupees 210 after 3 years. In the next

per annum is..

3 years, principal become 4 times, then the

a) 10%

B) 12%

D) 18%

E) 13%

C) 15%

C) 1000

total interest at the end of 6 years.

a) 1020

B) 1050

27. What annual instalment would clear a

D) 1100

E) None of these

debt of Rs 4.24 lakhs in two years at the

32.Rahul earns an income of rupees 1200

rate of 12% p.a. compound interest if

when he put rupees 3000 at R% per annum

interest is paid at end of year.

and rupees 4500 at one percent higher than

a) 250880

B) 276440

previous. He invests for a period of 5 years.

D) 292660

E) 269830

C) 284220

C) 1080

Find the rates of interest

28. Find the annual payment that will

a) 39/25 and 63/25

discharge a debt of Rs 15260 due in 4 years

64/25 C) 13/5 and 18/5

at 6% per annum simple interest (assume

D) 39/25 and 44/25

B) 38/25 and
E) None of these

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33.A sum of 5000 is invested in which the

37.Two equal amount of sum are deposited

investor gets 800 as simple interest at the

in banks at the rate 5 percent per annum.

rate of 4 percent per annum. To get an

The amount deposited for 3 and 5 years

interest of 2000 rupees on the same sum in

respectively. If the difference between the SI

the same number of years, what will be the

obtained is 120 rupees, then find the sum

rate of interest?

a) 1100

B) 1200

D) 1400

E) None of these

a) 5% B) 10%
D) 20%

C) 15%

C) 1300

E) None of these

38.A sum of rupees is divided between three

34.A certain sum of money is borrowed by

people A, B and C in such a way that after 2

ankit at 5 percent per annum for 10 years. If

years, 3 years and 4 years respectively the

he pays an interest of rupees 200, then the

amount they get is equal. The rate of

total amount paid by ankit.

interest is 10 percent. Find the ratio in which

a) 450

B) 500

the amount is divided.

D) 650

E) None of these

C) 600

a) 91:43:78 B) 91:84:78 C) 90:43:78

35.Rakesh borrowed rupees 5000 from a

D) 91:47:89 E) None of these

bank ABC at simple interest. He pays bank

39.Mohan invested 20000 rupee in fixed

3000 rupees at the end of 3 years and again

deposit at the rate of 10% simple interest.

he pays 2500 at the end of 5 years from the

After every 3 rd year he added interest to

date of borrowing, Find the rate of interest

principal. Find the interest earned at the end

charged by bank.

of 6th year.

a) 50/21 % B) 50/19 % C) 50/23 % D)

a) 7800

B) 8000

50/23 %

D) 8200

E) None of these

E) None of these

C) 7600

36.Some amount of money out of 8000

40.The simple interest on a certain sum is

rupees is lent at 8 percent and remaining at

4/9 of the principal and the numbers of

6 percent per annum. If the total interest

years is equal to the rate of interest. The

obtained from both sum in 4 years is 2400,

rate of interest is.

then find the sum lent at 8 percent rate

a) 20/3

B) 10/3

(approx)

D) 14/3

E) None of these

a) 6000

B) 3000

C) 5000

D) 4000

E) None of these

C) 13/3

41.On a certain sum of money, after 2 years

the simple interest and compound interest
obtained are Rs 800 and Rs 960 respectively.

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What is the sum of money invested?

D) 9%

E) 9.2%

A) Rs 1420 B) Rs 1325 C) Rs 1000

46.A sum of money becomes Rs 35, 280

D) Rs 1405 E) Rs 1375

after 2 years and Rs 37, 044 after 3 years

42.Rs 6000 becomes Rs 7200 in 3 years at a

when lent on compound interest. Find the

certain rate of compound interest. What will

principal amount.

be the amount received after 9 years?

A) Rs 32, 000

B) Rs 28, 000

A) Rs 11, 498

B) Rs 10, 352

C) Rs 31, 500

D) Rs 32, 500

C) Rs 9, 368

D) Rs 10, 368

E) None of these

E) None of these

47.The difference between compound

43.A man borrows Rs 4000 at 8% compound

interest earned after 3 years at 5% p.a. and

interest for 3 years. At the end of each year

simple interest earned after 4 years at 4%

he paid Rs 500. How much amount should

p.a. is Rs 76. Find the principal amount.

he pay at the end of 3rd year to clear the

A) Rs 32, 000

B) Rs 28, 000

debt?

C) Rs 31, 500

D) Rs 32, 500

A) Rs 4254.5

B) Rs 3465.2

E) None of these

C) Rs 3485.2

D) Rs 4345.4

48.A sum of money is lent at simple interest

E) Rs 4455.6

and compound interest. The ratio between

44.A sum of money is lent for 2 years at

the difference of compound interest and

20% p.a. compound interest. It yields Rs

simple interest of 3 years and 2 years is 35 :

482 more when compounded semi-annually

11. What is the rate of interest per annum?

than compounded annually. What is the sum

A) 20 3/4% B) 17 2/5% C) 18 2/11%

lent?

D) 22 1/5% E) 24 5/6%

A) Rs 25, 600

B) Rs 20, 000

49.A sum of money borrowed at 5%

C) Rs 26, 040

D) Rs 40, 500

compound interest is to paid in two annual

E) None of these

instalments of Rs 882 each. What is the sum

45.The compound interest obtained after 1st

borrowed?

and 2nd year is Rs 160 and Rs 172.8

A) Rs 1650 B) Rs 2340 C) Rs 2630

respectively on a certain sum of money

D) Rs 1640 E) Rs 2640

invested for 2 years. What is the rate of

50.Rs 3903 is to be divided in a way that As

interest?

share at the end of 7 years is equal to the

A) 10%

B) 8%

C) 8.5%

Bs share at the end of 9 years. If the rate of

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interest is 4% compounded annually, find As

3 years at 5% per annum. Find the sum

share.

a) 1000

B) 1500

A) Rs 2475 B) Rs 1875 C) Rs 2175

D) 2500

E) None of these

D) Rs 1935 E) Rs 2028

56.A sum of rupees 4800 is lent out in two

51.A certain sum of money amounts to

parts in such a way that the interest on one

rupees 2900 at 4% per annum in 4 years. In

part at 10% for 4 years is equal to that on

how many years will it amount to rupees

another part at 8% for 7 years. Find the two

5000 at the same rate in SI?

sums

a) 20 B) 22 C) 24 D) 25 E) None of these

a) 2800, 2000

B) 2400, 2400

52.A sum of money becomes four times at

C) 2600, 2200

D) 2700, 2100

simple interest rate of 5%. At what rate it

E) None of these

becomes seven times

57.The simple interest on a sum of money

a) 8%

B) 10%

C) 12%

D) 14%

D) None of these

C) 2000

will be rupees 400 after 5 years. In the next

5 years the principal is doubled, what will be

53.Arya borrows rupees 6000 from a bank at

the total interest at the end of the 10th year

SI. After 4 years she paid Rs 2500 to the

a) 800

B) 1000

bank and at the end of 5 years from the date

D) 1600

E) None of these

of borrowing he paid Rs 4560 to settle the

58.What annual instalment will discharge a

account. Find the rate of interest (approx)

debt of rupees 1060 due in 4 years at 4 %

a) 3.25%

B) 3.50%

simple interest?

D) 4%

E) None of these

C) 3.85%

C) 1200

a) 200

B) 250

C) 300

54.A sum of money lent out at simple

D) 400

E) None of these

interest amounts to rupees 840 in 3 years

59.Anil borrowed some money at the rate of

and to rupees 1200 in 8 years. Find the rate

5 percent per annum for the first 2 years, 3

of interest

percent for the next 4 years and 4 percent

a) 11.8/13%

B) 11.7/13%

per annum beyond 6 years. If the total

C) 12.8/13%

D) 12.7/13%

interest paid by him at the end of 9 years is

E) None of these

rupees 3400, how much money did anil

55.The simple interest on a certain sum of

borrow.

money at 4% per annum for 5 years is 100

a) 5000

B) 8000

more than the interest on the same sum for

D) 12000

E) None of these

C) 10000

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60.Saroj invested 20000 rupee in fixed

A.Rs.7500

B.Rs.5000

deposit at the rate of 10% simple interest.

D.Rs.9000

E.None of these

After every 3 rd year he added interest to

64.Rs.5200 was partly invested in Scheme A

principal. Find the interest earned at the end

at 10% pa CI for 2 years and Partly invested

of 6th year.

in Scheme B at 10% pa SI for 4 years. Both

a) 7800

B) 8000

C) 7600

D) 8200.

E) None of these

C.Rs.8200

the schemes earn equal interests. How much

was invested in Scheme A?

61.The difference between the total simple

A.Rs.1790

B.Rs.2200

interest and the total compound interest

D.Rs.2670

E.None of these

compounded annually at the same rate of

65.The CI on Rs.7000 for 3 years at 5% for

interest on a sum of money at the end of

first year, 7% for second year, 10% for the

two years is Rs. 350. What is definitely the

third year will be

rate of interest per cent per annum?

A.Rs.1800

B.Rs.1530

A.9, 300

C.12000

D.Rs.2050

E.None of these

E.None of these

66.Poorni and Priyanka have to clear their

B.7600

D.Data inadequate

C.Rs.3410

C.Rs.1651

62.Aswin invested an amount of Rs.9000 in

respective loans by paying 2 equal annual

a fixed deposit scheme for 2 years at CI rate

instalments of Rs.20000 each. Poorni pays at

6% pa. How much amount will Aswin get on

10% pa of SI and Priyanka pays at 10% CI

maturity of the fixed amount?

pa. What is the difference in their payments

A.Rs.11, 230

B.Rs.10, 250

C.Rs.10, 112

D.Data inadequate

A.200

B.300

E.None of these

D.500

E.None of these

63.A sum of money invested for 7years in

67.A sum of Rs.3, 50, 500 is to be paid back

Scheme 1 which offers SI at a rate of 8% pa.

in 2 equal annual instalments. How much is

The amount received from Scheme 1 after 7

each instalment, if the rate of interest

years invested for 2 years in Scheme 2

charged 4% per annum compound annually

which offers CI rate of 10% pa. If the

interest received from Scheme B was

A.Rs.1, 90, 450

B.Rs.1, 65, 876

Rs.1638. What was the sum invested in

C.Rs.1, 76, 545

D.Rs.1, 85, 834

Scheme 1 ?

E.None of these

C.400

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R.A.C.E
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68.At CI, if a certain sum of money is
doubled in 4 years, then the amount will be
four fold in how many years ?
A.7years

B.4years

C.10years

D.8years

E.None of these

69.X has lent some money to A at 5% pa

and B at 8% pa. At the end of the year he
has gain the overall interest at 7% pa.In

Our Branches

what ratio has he lent the money to A and

B?
A.2:1

B.1:2

C.3:1

D.1:4

E.None of these

70.The difference between interest received

by X and Y is Rs.315 on Rs.3500 for 3 years.
What is the difference in rate of interest ?
A.1.5%

B.2%

C.3%

D.2.7%

E.None of these
Answers

1. (b) 2. (b) 3. (a) 4. (a) 5. (b) 6. (b) 7. (c)

8. (c) 9. (c) 10. (b) 11. (c) 12. (a) 13. (a)
14. (a) 15. (c) 16. (c) 17. (a) 18. (c) 19. (b)

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20. (c) 21. (b) 22. (c) 23. (b) 24. (a) 25. (d)
26. (b) 27. (a) 28. (b) 29. (a) 30. (c) 31. (b)
32. (c) 33. (b) 34. (c) 35. (B) 36. (a) 37. (b)
38. (b) 39. (a) 40. (a) 41. (c) 42. (d) 43. (e)
44. (b) 45. (b) 46. (a) 47. (a) 48. (c) 49. (d)
50. (b) 51. (d) 52. (b) 53. (c) 54. (b) 55. (c)
56. (a) 57. (c) 58. (b) 59. (c) 60. (a) 61. (d)
62. (c) 63. (b) 64. (c) 65. (c) 66. (a) 67. (d)
68. (d) 69. (b) 70. (c)

11

Trichy: opp BSNL office, Juman Center, 43 Promenade Road, Cantonment. Mob: 9360703030
Salem: #209, Muthu Plaza, Junction Main Rd, State Bank Colony, Salem. Mob: 7305958080