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Compound Interest Questions Quiz for SBI PO Pre, CET, IBPS PO Pre, SBI Clerk, IBPS Clerk, 2021

Direction : Study the following questions carefully and choose the right answer.
1
Pankaj borrowed a total amount of Rs.32500 from his three friends Raj, Akash and Suresh. All of his friends apply different rates of interest in such a way that Raj applies 12%, Akash applies 16% and Suresh applies 18% interest rate respectively and total he gives Rs.5090 as interest. If the amount that Pankaj had taken from Raj is 18/25  of the amount taken from Suresh, then find that what amount Pankaj has taken from Akash?
» Explain it
C
Let the amount taken from Suresh is x and amount taken from Raj =  18x
25

Amount taken from Akash = 32500 – x –  18x  = 32500 –  43x
25 25

Total interest he gives -
 
  ( 18x )  × 12   ( 32500 –  43x )  × 16        
⇒  25  +  25  +  x × 18  = 5090 (Given)
100 100 100

216x – 688x + 450x = 12725000 – 13000000

22x = 275000

x = 12500

Amount taken from Akash
= 32500 – 43 ×  12500  = 32500 – 21500 = Rs.11000
25

Hence, option (C) is correct.

2
Mr. Bede wins Rs. 120000 on Kaun Banega Crorepati. He has to pay 25% as gift tax to the government. He places remaining money in fixed deposit @ 10% compounded annually. However, he has to pay 20% tax on the interest. How much money does Mr. Bede has after 4 years?
» Explain it
A
Bede has Rs 90000 with him after paying 25% as gift tax.

  Amount Invested Interest Tax
Year 1 90000 9000 1800
Year 2 97200 9720 1944
Year 3 104976 10497.60 2099.52
Year 4 113374.08 11337.408 2267.4816

So, Bede has Rs. (113374.08 + 11337.408 – 2267.4816) = Rs. 122444 at the end of 4th year.

Hence, option (A) is correct.

3
A person closes his account in an investment scheme by withdrawing Rs 10000. One year ago, he had withdrawn Rs 6000. Two years ago he had withdrawn Rs 5000. Three years ago he had not withdrawn any money. How much money had he deposited approximately at the time of opening the account 4 years ago, if the annual rate of compound interest is 10%.
» Explain it
A
Suppose the person has deposited Rs. X at the time of opening account.

After one year, he had

Rs. ( x +  x × 10 × 1 )  = Rs. 11x
100 10

After two years, he had
Rs. ( 11x  +  11x  ×  10 × 1 )  =  121x
10 10 100 100

After withdrawing Rs 5000 from Rs.  121x  , the balance
100

= Rs.  121x – 500000
100

After 3 years, he had
121x – 500000  +  121x – 500000  ×  10 × 1
100 100 100

11(121x – 500000)
1000
After withdrawing 6000 from above, the balance
= Rs. ( 1331x  – 11500 )
1000

After 4 years, he had
Rs. 11  ( 1331x  – 11500 – 10000 = 0
10 1000

⇒ Rs 15470

Hence, option (A) is correct.
 
4
A lent an amount of Rs. 1100 to B. This is to be paid back to A in two instalments. If the rate of interest, which A charges to B, be 20% compounded annually, then what is the value of each instalment ?
» Explain it
D
Let x = equal instalment at the end of each year

Now 1st year,

P = Rs. 1100

Interest at the end of 1st year =  1100 × 20 × 1  = Rs. 220
100

Now, at the beginning of 2nd year,

P = Rs. (1100 + 220 – x) = Rs. (1320 – x)

Interest at the end of 2nd year
(1320 – x) × 20 × 1  = 264 –  x
100 5

Now amount remaining after 2 years
= (1320 – x) +  ( 264 –  x )  – x = 0
5

⇒ 2x +  x  = 1320 + 264
5

⇒  11x  = 1584
5

⇒ X = 720

Hence, option (D) is correct.
 
5
The simple interest accrued on an amount of Rs. 18,500 at the end of three years is Rs. 7770. What would be the compound interest accrued on the same amount at the same rate in the same period?
» Explain it
A
We know that

Rate =  SI × 100
Principal × Time

7770 × 100  = 14% per annum
18500 × 3

We know the formula for compound interest -
⇒ CI =  [ P { ( 1 +  r ) t  – 1 } ]
100  

Where,

CI = Compound interest

P = Principal

R = Rate of interest

T = Time period

18500 [ ( 1 +  14 ) 3  – 1 ]  = 18500 [(1.14)3 –1]
100  

⇒ 18500 × 0.481544 = Rs 8908.56

Hence, option (A) is correct.