model 1 basic compound interest using formula Section-Wise Topic Notes With Detailed Explanation And Example Questions
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The following question based on compound interest topic of quantitative aptitude
(a) Rs.11,320
(b) Rs.12,000
(c) Rs.12,500
(d) Rs.12,320
The correct answers to the above question in:
Answer: (d)
Using Rule 3,
A = P$(1 + r_1/100)(1 + r_2/100)$
= 10000$(1 + 10/100)(1 + 12/100)$
= 10000 × $11/10 × 28/25$ = Rs.12320
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Read more basic problems using formula Based Quantitative Aptitude Questions and Answers
Question : 1
The sum of money that yields a compound interest of Rs.420 during the second year at 5% p.a is
a) Rs.21,000
b) Rs.4,000
c) Rs.8,000
d) Rs.42,000
Answer »Answer: (c)
Using Rule 1,
CI = P$[(1 + R/100)^T –1] - {PR}/100$
420 = P$[(1 + 5/100)^2 - 1] - {P × 5}/100$
420 = P$[(21/20)^2 - 1] - {5P}/100$
420 = ${41P}/400 - {5P}/100 = {21P}/400$
P = ${420 × 400}/21$ = Rs.8000
Question : 2
An amount of Rs.6,000 lent at 5% per annum compound interest for 2 years will become
a) Rs.6,615
b) Rs.600
c) Rs.6,610
d) Rs.6,600
Answer »Answer: (a)
Using Rule 1,
A = P$(1 + R/100)^T$
= 6000$(1 + 5/100)^2$
= 6000 × $21/20 × 21/20$ = Rs.6615
Question : 3
The compound interest on Rs.2000 in 2 years if the rate of interest is 4% per annum for the first year and 3% per annum for the second year, will be
a) Rs.143.40
b) Rs.142.40
c) Rs.141.40
d) Rs.140.40
Answer »Answer: (b)
Using Rule 3,
Amount = $2000(1 + 4/100)(1 + 3/100)$
= 2000 ×1.04 ×1.03 = Rs.2142.40
CI = Rs.(2142.40 - 2000) = Rs.142.40
Question : 4
In what time Rs.8,000 will amount to Rs.9,261 at 10% per annum compound interest, when the interest is compounded half yearly ?
a) 2 years
b) 3$1/2$ years
c) 2$1/2$ years
d) 1$1/2$ years
Answer »Answer: (d)
Using Rule 1 and 2,
Interest is compounded half yearly.
Rate of interest = 5%
Time = $n/2$ years (let)
or n half-years
A = P$(1 + R/100)^T$
9261 = 8000$(1 + 5/100)^n$
$9261/8000 = (21/20)^n$
$(21/20)^3 = (21/20)^n$
n = 3 half years
= $3/2$ years = $1{1}/2$ years
Question : 5
A sum of Rs.8000 will amount to Rs.8820 in 2 years if the interest is calculated every year. The rate of compound interest is
a) 5%
b) 6%
c) 3%
d) 7%
Answer »Answer: (a)
Using Rule 1,
If the rate of C.I. be r% per annum, then
A = P$(1 + R/100)^T$
8820 = 8000$(1 + r/100)^2$
$8820/8000 = (1 + r/100)^2$
$441/400 = (21/20)^2 = (1 + r/100)^2$
$1 + r/100 = 21/20$
$r/100 = 21/20 - 1 = 1/20$
r = $1/20$ × 100
r = 5% per annum
Question : 6
The compound interest on Rs.16,000 for 9 months at 20% per annum, interest being compounded quarterly, is
a) Rs.2,518
b) Rs.2,520
c) Rs.2,522
d) Rs.2,524
Answer »Answer: (c)
Using Rule 1,
The interest is compounded quarterly.
R = $20/4$ = 5%
Time = 3 quarters
C.I. = P$[(1 + R/100)^T - 1]$
= 16000$[(1 + 5/100)^3 - 1]$
= $16000[(21/20)^3 - 1]$
= $16000({9261 - 8000}/8000)$
= $16000 × 1261/8000$ = Rs.2522
compound interest Shortcuts and Techniques with Examples
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model 1 basic compound interest using formula
Defination & Shortcuts … -
model 2 at ci sum becomes ‘n’ times after ‘t’ years
Defination & Shortcuts … -
model 3 combination of si & ci
Defination & Shortcuts … -
model 4 difference in ci & si
Defination & Shortcuts … -
model 5 ci with instalments
Defination & Shortcuts … -
model 6 comparing sum in different years
Defination & Shortcuts …
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