model 4 difference in ci & si Section-Wise Topic Notes With Detailed Explanation And Example Questions

MOST IMPORTANT quantitative aptitude - 6 EXERCISES

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The following question based on compound interest topic of quantitative aptitude

Questions : The difference between the compound and the simple interest on a sum for 2 years at 10% per annum, when the interest is compounded annually, is 28. If the interest were compounded halfyearly, the difference in the two interests will be

(a) 43.29

(b) 44

(c) 43.41

(d) 28.35

The correct answers to the above question in:

Answer: (c)

Using Rule 6,
The difference between C.I. and S.I. on a sum 'P' in 2 years at the rate of R% rate of compound interest will be
C.I - S.I. = P$(R/100)^2 = {S.I. × R}/200$
For 3 years, C.I. - S.I. = P$(R/100)^2 × (3 + R/100)$

Using Rule 1,
If A = Amount, P = Principal, r = Rate of Compound Interest (C.I.), n = no. of years then,
A=P$(1 + r/100)^n$, C.I. = A - P
C.I. = P$[(1 + r/100)^n - 1]$

If the difference between compound interest and simple interest at the rate of r% per annum for 2 years be x, then

Principal = $x(100/r)^2$

= 28$(100/10)^2$ = Rs.2800

If the interest is compounded half yearly, then

r = $10/2$ = 5%,

Time = 4 half years

Simple interest

= ${2800 × 5 × 4}/100$ = Rs.560

Compound interest

= $2800[(1 + 5/100)^4 - 1]$

= 2800 [1.2155 - 1]

= 2800 × 0.2155 = 603.41

Difference = Rs.(603.41–560) = Rs.43.41

Practice compound interest (model 4 difference in ci & si) Online Quiz

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Read more difference in ci and si Based Quantitative Aptitude Questions and Answers

Question : 1

On a certain sum of money lent out at 16% p.a. the difference between the compound interest for 1 year, payable half yearly, and the simple interest for 1 year is 56. The sum is

a) 5780

b) 1080

c) 8750

d) 7805

Answer: (c)

Using Rule 6,

Rate of interest = 8% per halfyear

Time = 2 half years

Difference of interests = ${PR^2}/100$

56 = $P × (8)^2/(100)^2$

P = ${56 × 10000}/64$ = 8750

Question : 2

The difference between simple and compound interest on a certain sum of money for 2 years at 4 per cent per annum is 1. The sum of money is :

a) 650

b) 600

c) 560

d) 625

Answer: (d)

Using Rule 6,

When difference between the CI and SI on a certain sum of money for 2 years at r % rate is x, then

Sum = x × $(100/r)^2$

= 1 × $(100/4)^2$ = Rs.625

Question : 3

A sum of 6,000 is deposited for 3 years at 5% per annum compound interest (compounded annually). The difference of interests for 3 and 2 years will be

a) 375.00

b) 75.00

c) 330.75

d) 30.75

Answer: (c)

Using Rule 1,
If A = Amount, P = Principal, r = Rate of Compound Interest (C.I.), n = no. of years then,
A=P$(1 + r/100)^n$, C.I. = A - P
C.I. = P$[(1 + r/100)^n - 1]$

C.I. after 3 years

= 6000$[(1 + 5/100)^3 - 1]$

= 6000$({9261 - 8000}/8000)$

= 6000 × $1261/8000$ = Rs.945.75

CI after 2 years

= $6000[(1 + 5/100)^2 - 1]$

= 6000$({441 - 400}/400)$

= 6000 × $41/400$ = Rs.615

Required difference

= Rs.(945.75 - 615) = Rs.330.75

Question : 4

What sum will give 244 as the difference between simple interest and compound interest at 10% in 1 1 2 years compounded half yearly ?

a) 28,000

b) 40,000

c) 32,000

d) 36,000

Answer: (c)

Using Rule 6,

Time = $3/2 × 2 = 3$ half years

Rate = $10/2$ = 5% per half year

[Since, when r → $r/2$, then t → 2t]

Difference = P$(r^3/1000000 + {3r^2}/10000)$

244 = P$(125/1000000 + 75/10000)$

244 = P$(7625/1000000)$

P = ${244 × 1000000}/7625$ = Rs.32000

Question : 5

If the difference between S.I. and C.I. for 2 years on a sum of money lent at 5% is 6, then the sum is

a) 2000

b) 2200

c) 2600

d) 2400

Answer: (d)

Using Rule 6,
The difference between C.I. and S.I. on a sum 'P' in 2 years at the rate of R% rate of compound interest will be
C.I - S.I. = P$(R/100)^2 = {S.I. × R}/200$
For 3 years, C.I. - S.I. = P$(R/100)^2 × (3 + R/100)$

Difference = ${Pr^2}/10000$

6 = ${P × 5 × 5}/10000$

P = 6 × 400 = Rs.2400

Question : 6

Find the difference between the compound interest and the simple interest on 32,000 at 10% p.a. for 4 years.

a) 2501.20

b) 2051.20

c) 2025.20

d) 2052.50

Answer: (b)

Using Rule 1,

S.I. = $\text"Principal × Time × Rate"/100$

= ${32000 × 4 × 10}/100$ = Rs.12800

C.I. = P$[(1 + R/100)^4 - 1]$

= 32000$[(1 + 10/100)^4 - 1]$

= 32000 $[(1.1)^4$ - 1]

= 32000 (1.4641 - 1)

= 32000 × 0.4641= Rs.14851.2

Required difference

= 14851.2 - 12800 = Rs.2051.2

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