# model 1 basic compound interest using formula Practice Questions Answers Test with Solutions & More Shortcuts

#### compound interest PRACTICE TEST [6 - EXERCISES]

Question : 1 [SSC CGL Tier-I 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

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

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 Tier-I 2010]

In how many years will a sum of Rs.800 at 10% per annum compound interest, compounded semi-annually becomes Rs.926.10 ?

a) 2\$1/2\$ years

b) 1\$1/2\$ years

c) 2\$1/3\$ years

d) 1\$2/3\$ years

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 Tier-I 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%

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

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

## Recently Added Subject & Categories For All Competitive Exams

#### 100+ One Word Substitution Practice Test, PDF for SSC

Learn more One Word Substitution questions and answers, PDF for SSC. The most important General English MCQ Practice exercise for all competitive exams

11-Jul-2024 by Careericons

#### Top Para Jumbled Sentences Questions PDF for SSC Exams

New Para-Jumbles or Jumbled-Sentences Questions and Answers with PDF for SSC. General English Rearrangement of Sentences model exercise for all Bank Exams

11-Jul-2024 by Careericons

#### Top Permutation and Combination Practice Questions PDF

Top Permutation and Combination Questions and Answers with Solutions, PDF for SSC. Best Aptitude MCQ Practice Exercise for all competitive, Govt exams

10-Jul-2024 by Careericons

#### Top 100+ Probability MCQ Questions and Answers PDF: SSC

Recent Probability Multiple Choice Questions and Answers with Detailed Solution, download PDF for SSC. Aptitude practice exercise for all Government exams

10-Jul-2024 by Careericons