This set of Mathematics Multiple Choice Questions & Answers (MCQs) focuses on “Compound Interest”.

1. Calculate the simple interest if the principal amount is 50000 and the rate is 2% for 4 years.

a) 4000

b) 400

c) 40000

d) 40

View Answer

Explanation: S.I. = PNR/100

⇒ S.I. = 50000 × 2 × 4/100 = 4000.

2. Find the Compound Interest on Rs. 1000 for two years at 2% per annum.

a) 20

b) 20.5

c) 20.4

d) 20.6

View Answer

Explanation: Principal for the first year = Rs. 1000

Interest for the first year = 1000 × 2 × 1/100 = Rs. 20

Amount at the end of one year = 1000 + 20 = Rs. 1020

Interest for second year = 1020 × 2 × 1/100 = Rs. 20.4

Principal for the second year = Rs. 1020

Amount at the end of one year = 1000 + 20. 4 = Rs. 1040.4

C.I. = Amount – Principal = 1040.4 – 1020 = Rs. 20.4.

3. Evaluate the compound interest on Rs. 10101 for 3 years at the rate of 9% per annum compounded annually.

a) 2980

b) 30000

c) 10101

d) 33333

View Answer

Explanation: A = P (1 + \(\frac{R}{100})\)

^{n}

⇒ A = 10101 (1 + \(\frac{9}{100}\))

^{3}= 10101 (\(\frac{109}{100}\))

^{3}= Rs. 13081.08

C.I. = A – P = 13081.08 – 10101 = Rs. 2980.08.

4. Vidhya lent Rs. 5000 to Kavya for 3 years at the rate of 5% per annum compound interest. Calculate the amount that Vidhya will get after 3 years.

a) 5789

b) 5788.12

c) 5788.13

d) 5788

View Answer

Explanation: A = P (1 + \(\frac{R}{100})\)

^{n}

Amount for 3 years = 5000 (1 + \(\frac{5}{100}\))

^{3}= 5000 (\(\frac{21}{20}\))

^{3}= 5788.13.

5. A farmer gets a loan of Rs. 100000 against his fixed deposits. If the rate of interest is 1.5 paise per rupee per annum, calculate the compound interest payable after 2 years.

a) 22250

b) 42250

c) 52250

d) 32250

View Answer

Explanation: R = 1.5 paise per rupee per annum = 1.5 × 100 paise per hundred rupee per annum

= 1.5 × \(\frac{100}{100}\) rupee per hundred rupee per annum = 1.5%

Amount = 100000 (1 + \(\frac{1.5}{100}\))

^{2}= 100000 (\(\frac{23}{20}\))

^{2}= 132250

C.I. = 132250 – 100000 = Rs. 32250.

6. Calculate the compound interest at the rate of 6% per annum for 2 years on the principle which in 2 years at the rate of 2% per annum gives Rs. 8000 as simple interest.

a) 50000

b) 49440

c) 59440

d) 49000

View Answer

Explanation: P = 8000 × \(\frac{100}{2}\) × 2 = 400000

A = 400000(1 + \(\frac{6}{100}\))

^{2}= 400000 (\(\frac{53}{50}\))

^{2}= Rs. 449440

C.I. = 449440 – 400000 = Rs. 49440.

7. Compute the compound interest on Rs. 16000 for 2 years 10% per annum when compounded half yearly.

a) 18600

b) 17640

c) 18640

d) 17600

View Answer

Explanation: A = P (1 + \(\frac{R}{200}\))

^{2n}

⇒ A = 16000 (1 + \(\frac{10}{200}\))

^{2}= 16000 (\(\frac{21}{20}\))

^{2}= Rs. 17640.

8. Find the amount on Rs. 5000 at the rate of 20% per annum for 18 months when interest is compounded half yearly.

a) 6644

b) 6666

c) 6000

d) 6655

View Answer

Explanation: n = 18/12 = 3/2

A = P (1 + \(\frac{R}{200}\))

^{2n}= 5000 (1 + \(\frac{20}{200}\))

^{2n}= Rs. 6655.

9. If the amount is Rs. 400 and Principal is Rs. 100 which is compounded half yearly for 1 year, calculate the rate of interest.

a) 10

b) 200

c) 2

d) 20

View Answer

Explanation: A = P (1 + \(\frac{R}{200}\))

^{2n}

⇒ 400 = 100 (1 + \(\frac{R}{200}\))

^{2}

⇒ 2 = 1 + \(\frac{R}{200}\)

R = 200.

10. Calculate the compound interest on Rs. 4000 for 2 years at 20% per annum when compounded annually.

a) 1856.4

b) 1756.4

c) 1846.4

d) 1746.4

View Answer

Explanation: A = P (1 + \(\frac{R}{200}\))

^{2n}= 4000(\(\frac{11}{10}\))

^{4}= Rs. 5856.4

C.I. = 5856.4 – 4000 = Rs. 1856.4.

**Sanfoundry Global Education & Learning Series – Mathematics – Class 8**.

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