# Compound Interest Questions

This post is a collection of important compound interest multiple choice questions.
All the questions are important as they have been previously asked in competition exams like GRE, GMAT, Math Olympiad, SSC, CAT, NMAT, CMAT, SBI po etc.

My sincere request for all the students out there is to practice all the questions and try to remember the concept used for each question.

## Compound Interest MCQ

Q1. A sum of money placed at compound interest doubles itself in 3 years. In how many years will it amount to 8 times itself?

(a) 9 years                           (b) 8 years

(c) 27 years                         (c) 7 years

Hence (a) is the right answer

Q2. Divide 3903 between  Rakesh Yadav  and Bhuvnesh such that Rakesh share at the end of 7 years is equal to Bhuvnesh share at the end of 9 years at 4% per annum rate of compound interest.

(a) Rakesh=₹2028,
Bhuvnesh=₹1875

(b) Rakesh=₹2008,
Bhuvnesh=₹1000

(c) Rakesh=₹2902,
Bhuvnesh=₹1001

(d) Rakesh=₹2600,
Bhuvnesh=₹1303

option (a) is the right answer

Q3. If the simple Interest is 10.5% annual and compound interest is 10% annual, find the difference between the interests after 3 years on a sum of ₹1000.

(a) ₹15                                  (b) ₹12

(c) ₹16                                  (d) ₹11

option (c) is the right answer

Q4.What will be the present value of payable ₹14580 after two years at 8% per annum compound interest?

(a) ₹11500                           (b) ₹12500

(c) ₹10500                           (d) None of these

\ \ \ \ \ \ \ \ Amount(A)=14580,\quad Rate(R)=8,\quad Time(n)=2\\\ \\ 14580=P{ (1+\frac { 8 }{ 100 } ) }^{ 2 }\\\ \\ 14580=P{ (\frac { 729 }{ 625 } ) }\\\ \\ \ P=₹12500\\\ \\ \ Present\quad value\quad is\quad ₹12500.\ \ \

option (b) is the right answer

Q5. What annual payment will discharge a debt of ₹1025 due in 2 years at the rate of  5%  compound interest.

(a) ₹515.25                          (b) ₹561.25

(c) ₹516.25                          (d) ₹551.25

Principal(P)=1025,\quad Rate(R)=5,\quad Time(n)=2\\\ \\ Annual\quad Payment=\quad \frac { P }{ \frac { 1 }{ { (1+\frac { R }{ 100 } ) } } +\frac { 1 }{ { (1+\frac { R }{ 100 } ) }^{ 2 } } } \\\ \\ Annual\quad Payment=\quad \frac { 1025 }{ \frac { 1 }{ { (1+\frac { 5 }{ 100 } ) } } +\frac { 1 }{ { (1+\frac { 5 }{ 100 } ) }^{ 2 } } } \\\ \\ Annual\quad Payment=\quad 1025\times \frac { 441 }{ 820 } \\\ \\ Annual\quad Payment=\quad ₹551.25\

option (a) is the right answer

Q6. A tree increases  times per year in length. If present height of the tree is 64cm, then what will be the height after two years?

(a)72cm                                (b)90cm

(c)81cm                                 (d) None of these

Option (c) is the right answer

Q07. A sum of ₹2400 deposited at CI, doubled after 5 year. After 20 years it will become:

(a) ₹24000                           (b) ₹19200

(c)  ₹38400                    (d) can’t be determined

Option (b) is the right answer

Q08. A certain sum amounts to ₹8988.8 in two year and to ₹9528.128 in three years, at compound interest per annum. What is the principal and rate of interest?

(a) ₹12000, 5%                   (b) ₹6000, 8%

(c) ₹8000, 6%                     (d) ₹10000, 8.5%