model 1 basic compound interest using formula Practice Questions Answers Test with Solutions & More Shortcuts
compound interest PRACTICE TEST [6  EXERCISES]
model 1 basic compound interest using formula
model 2 at ci sum becomes ‘n’ times after ‘t’ years
model 3 combination of si & ci
model 4 difference in ci & si
model 5 ci with instalments
model 6 comparing sum in different years
Question : 1 [SSC CGL TierI 2013]
The time in which Rs.80,000 amounts to Rs.92,610 at 10% p.a. compound interest, interest being compounded semi annually is :
a) 3 years
b) 1$1/2$ years
c) 2$1/2$ years
d) 2 years
Answer »Answer: (b)
Using Rule 1 and 2,
Time = t half year
and R = 5% per half year
A = P$(1 + R/100)^T$
$92610/80000 = (1 + 5/100)^T$
$9261/8000 = (21/20)^T$
T = 3 half years or 1$1/2$ years
$(21/20)^3 = (21/20)^T$
Question : 2 [SSC CPO S.I.2006]
If the rate of interest be 4% per annum for first year, 5% per annum for second year and 6% per annum for third year, then the compound interest of Rs.10,000 for 3 years will be
a) Rs.2,000
b) Rs.1,600
c) Rs.1,575.20
d) Rs.1,625.80
Answer »Answer: (c)
Using Rule 3,
If there are distinct 'rates of interest' for distinct time periods i.e.,
Rate for 1st year → $r_1$%
Rate for 2nd year → $r_2$%
Rate for 3rd year → $r_3$% and so on
Then A = P$(1 + r_1/100)(1 + r_2/100)(1 + r_3/100)$...
C.I. = A  P
Amount = P$(1 + R_1/100)(1 + R_2/100)(1 + R_3/100)$
= 10000$(1+ 4/100)(1 + 5/100)(1 + 6/100)$
= $10000 × 26/25 × 21/20 × 53/50$
A = Rs.11575.2
C.I. = Rs.(11575.2–10000) = Rs.1575.2
Question : 3 [SSC CGL TierI 2010]
In how many years will a sum of Rs.800 at 10% per annum compound interest, compounded semiannually becomes Rs.926.10 ?
a) 2$1/2$ years
b) 1$1/2$ years
c) 2$1/3$ years
d) 1$2/3$ years
Answer »Answer: (b)
Using Rule 1 and 2,
Rate = 10% per annum = 5% half yearly
A = P$(1 + R/100)^T$
926.10 = 800$(1 + 5/100)^T$
$9261/8000 = (21/20)^T$
$(21/20)^3 = (21/20)^T$
Time = 3 half years = 1$1/2$ years
Question : 4 [SSC CGL TierI 2010]
At what rate per cent per annum will a sum of Rs.1,000 amounts to Rs.1,102.50 in 2 years at compound interest ?
a) 6.5%
b) 5%
c) 6%
d) 5.5%
Answer »Answer: (b)
Using Rule 1,
A = P$(1 + R/100)^T$
Let rate be 'r'
${1102.50}/1000 = (1 + r/100)^2$
$11025/10000 = (1 + r/100)^2$
$(105/100)^2 = (1 + r/100)^2$
1 + $r/100 = 105/100$
$r/100 = 5/100$ = 5%
Question : 5 [SSC CGL Prelim 2003]
In what time will Rs.1000 amounts to Rs.1331 at 20% per annum, compounded half yearly ?
a) 2$1/2$ years
b) 1$1/2$ years
c) 1 year
d) 2 years
Answer »Answer: (b)
Using Rule 1 and 2,
Let the required time be t years. Interest is compounded half yearly.
Time = 2t half years and rate
= $20/2$ = 10%
1000$(1 + 10/100)^{2t}$ = 1331
$(11/10)^{2t} = 1331/1000$
$(11/10)^{2t} = (11/10)^3$ ⇒ 2t = 3
t = $3/2$ years or 1$1/2$ years
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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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