Simple Interest and Compound Interest Quiz for IBPS PO : Set – 1

December 5, 2017

1. A starts a business by investing a capital of Rs. 120000 and B joins him 3 months later. After the first year, the ratio of the profit earned by A and B is 20: 21, respectively. A invests his profit at S.I. of 8% p.a. for 2 years and B invests his profit at an interest of 10%, compounded annually, for 2 years. The interest earned by B is Rs.2420 more than the interest earned by A. The total profit earned by A and B at the end of the first year is what percentage of the total invested capital in the same year?
A. 13.54 %
B. 40.95 %
C. 39.22 %
D. 16.31 %
E. None of these

Answers

E – None of these.

2. A sum of Rs. 10000 is borrowed at 8% p.a. compounded annually which is paid back in 3 equal annual installments. What is the amount of each installment?
A. Rs. 3860.885
B. Rs 3256.775
C. Rs 3880.335
D. Rs 3456.775
E. None of these

Answers

Option- C

10000=x[ 25/27+ (25/27)2 + (25/27)3]

Solving the above we get, x= 3880.335

For finding instalments we use,

P= [x/(1+ r/100) + x/(1 + r/100)

2+…………………+ x/(1+r/100)n ]

Where x is the value of each instalment.


3. The simple interest on a certain principal for a time period of 4 years at 8% p.a. is Rs. 1280. If the same principal is invested at 10% p.a. compound interest compounded annually, what will be the amount after 2 years?
A. Rs. 4960
B. Rs 4920
C. Rs 4800
D. Rs 4840
E. None of these

Answers

Option- D

Time = 4 years and Rate = 8% p.a.

Hence 1280 = p*4*8/100.

Thus p = 128000/32 = Rs.4000.

Now for compound interest, p = 10% p.a compounded annually and n = 2 years

Amount after compound interest = p*(1+(r/100))

n

Hence amount = 4000(1+(10/100))

2 = 4000*(1.1)

2 = 4000*1.21= Rs.4840.

Hence the amount is Rs.4840.


4. Root and Gregg invested Rs. 14700 at a simple interest of 5% per annum for 4 years and 8 years respectively. The interest earned by Gregg is how much more (in Rs) than that of interest earned by Root?
A. Rs. 735
B. Rs 1470
C. Rs 2940
D. Rs 4410
E. None of these

Answers

Option – C

Interest earned by Root = (14700*5*4) /100 = 2940

Interest earned by Gregg = (14700*5*8) /100 = 5880

Required answer = 5880 – 2940 = Rs. 2940


5. A man invests half his capital at the rate of 10% per annum, one third at 9% and the rest at 12% per annum. The average rate of interest per annum, which he gets, is-
A. 9 %
B. 10 %
C. 10.5 %
D. 12 %
E. None of these

Answers

Option – B


6. A Person takes a loan of Rs. 200 at 5% simple interest. He returns Rs. 100 at the end of one year. In order to clear his dues at the end of 2 years, he would pay:-
A. Rs.125.50
B. Rs.110
C. Rs.115.5
D. 117.25
E. None of these

Answers

Option – C

Amount to be paid in first year = (200*5*1/100)+200=210

 Amount left as a principal for the second year = 210-100=110

Amount paid in second year = 110+ (110*5*1/100)=115.5


7. A lends a sum of money for 10years at 5% SI. B lends double the amount for 5years at the same rate of Interest. Which of the following statement is true in this regard?
A. A will get twice the amount of interest that B would get
B. B will get twice the amount of interest that A would get
C. A will get the same amount of interest that B would get
D. B will get four times the amount of interest that A would get
E. None of these

Answers

Option – C


8. Pratibha invests an amount of Rs.15,860 in the names of her three daughters A, B and C in such a way that they get the same interest after 2, 3 and 4 years respectively. If the rate of simple interest is 5% p.a., then the ration of the amounts invested among A, B and C will be :
A. 5 : 10 : 12
B. Rs.110
C. 1/10 : 1/15 : 1/20
D. 6 : 5 : 4
E. None of these

Answers

Option – C

P1*2*5/100 = P2*3*5/100 = P3*4*5/100

    => 10P1 = 15P2 = 20P3

   => P:   P2   :  P3

      30   :   20   :  15= 1/10  :  1/15  :  1/20


9. What annual payment will discharge a debt of Rs. 580 in 5 years, the rate being 8% p.a. ?
A. 120
B. 100
C. 80
D. 78
E. None of these

Answers

Option – B

580= [ (x) + (x+ x*1*8/100) + (x+ x*2*8/100)+ (x+ x*3*8/100) + (x+ x*4*8/100)]

       580 = 5x+ 8x/10 = 58x/10

       X= 100


10. Find the amount of Rs. 2500 invested at 12% during the period from 4th Feb, 2017 to 18 Apr 2017 :
A. Rs.3000
B. Rs.3800
C. Rs.2560
D. 2600
E. None of these

 
Answers

Option – C

Feb       March      April

       Time Period  =    24    +    31     +     18  =73days = 1/5 year

       2500  + (2500*12*1/100*5) = 2560 Rs.


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