# Compound Interest Questions with Detailed Explanations ### Ques 1.

Population of a city is 198000. It increased by 7% in the Ist year and decreased by 5% in the IInd year. What is the population of the city in third year.
(a) 218900
(b) 201267

(c) 201860
(d) 212453

### Ques 2.

What will be the difference in annual simple and compound interests at the rate of 12%p.a on the sum Rs. 960 after 2 years  compounded annually? (Very important)
(a) Rs. 13.824
(b) Rs. 20.224
(c) Rs. 24.04
(d) Rs. 31

### Ques 3.

If  rate of interest is 4% compounded quarterly. What will be the amount if a man invests Rs. 2000 for 1 year  ?
(a) Rs. 2060
(b) Rs. 2081.21
(c) Rs. 2100.25
(d) Rs. 2125.54

### Ques 4.

A bank offers 5% interest compounded half yearly. A customer deposits Rs. 1600 each on 1st January and 1st July of a year . At the end of the year , the amount he would have gained by the way of interest is :
(a) Rs. 123
(b) Rs, 122
(C) Rs. 121
(d) Rs. 120

### Ques 5.

An amount increased by 60% in years at simple interest. What will be the compound interest of Rs. 12000 after 3 years at the same rate ?
(a) Rs. 6240
(b) Rs. 3972
(c) Rs. 3120
(d) Rs. 2160

### Ques 6.

If a sum of money is borrowed and returned in equal installments of Rs.882. Find the sum borrowed : (Very important)
(a) Rs. 1700
(b) Rs. 1680
(c) Rs. 1640
(d) Rs.1620

### Ques 7.

In how many years a sum of money will be doubled if interest rate is 20% compounded annually.
(a) 6
(b) 5
(c) 4
(d) 3

### Ques 8.

Nominal rate of compound interest is 6%per annum paid half yearly. Find effective rate of interest :
(a) Rs. 6.09%
(b) Rs. 6.08%
(c) Rs. 6.07%
(d) Rs. 6.06%

### Solutions :

Ans 1. Ans 2. Ans 3. Ans 4.
. Hence, required interest = 3321 - 3200 = Rs. 121

Ans  5. Ans 6. Ans 7. So, n = 4 years

Ans 8. Hence , C.I = 106 .09 - 100 = Rs. 6.09
So, required effective rate = 6.09% p.a. 