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Quiz: Compound Interest

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Number of Questions: 30

Question: 26 -

The difference between compound interest & simple interest on an amount of Rs. 15,000 for 2 years is Rs. 96. What is the rate of interest per annum? 

Options:

  1. None of these

  2. 12

  3. 10

  4. 8

    5. Answer:

    8
    Solution:

      15000 x 1 + R/ 2 - 15000 - 15000 x R x 2/ = 96
    100 100
    15000 1 + R/ 2 - 1 - 2R/ = 96
    100 100
    15000 (100 + R)2 - 10000 - (200 x R)/ = 96
    (10000)
    R2 = 96 x 2/ = 64
    3

    R = 8.

    Rate = 8%.

Question: 27 -

Brody bought a gadget for Rs. 21000. If the cost of the gadget after 2 years depreciates to Rs. 18162, find the rate of depreciation.

Options:

  1. 15%

  2. 7%

  3. 5%

  4. 20%

    5. Answer:

    7%
    Solution:

    Let R be the rate of depreciation
    ⇒ 18162 = 21000 (1 + R/100)2
    ⇒ 181622/1000 = (1 + R/100)2
    ⇒ (0.8648)2 = (1 + R/100)2
    ⇒ (0.929) = (1 + R/100)
    ⇒ R = 7%.

Question: 28 -

The value of a land increases every year at the rate of 8%. If its value at the end of 3 years be Rs 6000000, find its original value at the beginning of these years.

Options:

  1. 4762994

  2. 4000000

  3. 3762994

  4. 3000000

    5. Answer:

    4762994
    Solution:

    R = 8% and n = 3
    ⇒ 6000000 = P (1 + 8/100)3
    ⇒ 6000000 = P (27/25)3
    ⇒ P = 4762994.

Question: 29 -

A new two-wheeler costs Rs. 90000. Its price depreciates at the rate of 10% a year during first two years and the rate of 25% a year thereafter. Find the cost of the two-wheeler after 3 years.

Options:

  1. 540000

  2. 55000

  3. 50460

  4. 546750

    5. Answer:

    546750
    Solution:

    Cost of the vehicle = Rs 90000
    Rate of depreciation in the first two years = 10%
    Rate of depreciation in the second year = 25%
    ⇒ Price of the vehicle after 3 years = 90000 (1 – 10/100)2 (1 – 25/100) = 90000 (9/10)2(3/4) = Rs. 546750.

Question: 30 -

The value of a gadget worth Rs.10000 is depreciating at the rate of 10% per annum. In how many years will its value be reduced to Rs 6561?

Options:

  1. 4

  2. 3

  3. 5

  4. 2

    5. Answer:

    4
    Solution:

    Present value = Rs. 10000
    Depreciated value = Rs. 6561
    Rate of depreciation = 10%
    ⇒ 6562 = 10000 (1 – 10/100)n
    ⇒ 6562/10000=(9/10)n
    ⇒ (9/10)n = (9/10)n
    ⇒ n = 4.