Level 1
Simple & Compound Interest MCQs set 2 for NBP Officer Grade (IBA / NTS) Mathematics — 20 solved questions.
Q1. The difference between compound interest and simple interest on a sum for 2 years at 8% P.a is Rs 768. The sum is:_________?
Answer: Rs120,000
Explanation: CI−SI for 2 years = P×(r/100)²; at 8%: P×0.0064 = 768 → P = Rs. 120,000.
Q2. A sum of money placed at compound interest doubles itself in 5 years in how many years it would to 8 times of itself at the same rate of interest?
Answer: 15 years
Explanation: If money doubles in 5 years, it increases 8-fold (2³) in 3×5 = 15 years.
Q3. The simple interest accrued on an amount of Rs.49500 at he end of three years is Rs.17820. What would be the compound interest accured on the same amount at teh same rate in the same period? (Round off your answer to two decimal places)
Answer: Rs.20043.94
Explanation: SI rate = 17820/(49500×3) = 12%; CI = 49500×((1.12)³−1) = 49500×0.404928 ≈ Rs. 20043.94.
Q4. A Sum of money at simple interest doubles in 10 years. In how many years, will it amount to 4 times itself?
Answer: 30 years
Explanation: Doubles in 10 years means rate = 10% SI; to become 4 times, interest needed = 3P; time = 3P/(P×0.10) = 30 years.
Q5. A man buys a watch for Rs. 1950 in cash and sells it for Rs. 2200 at a credit of 1 year. If the rate of interest is 10% per annum, the man:
Answer: Gains Rs. 50
Explanation: Present value of Rs. 2200 received after 1 year at 10% = 2200/1.10 = Rs. 2000; gain = 2000−1950 = Rs. 50.
Q6. The simple interest on Rs.12000 at a certain rate of interest in five years is Rs.7200. Find the compound interest on the same amount for five years at the same rate of interest. Interest
Answer: Rs. 9148.1
Explanation: SI rate = 7200/(12000×5) = 12% p.a.; CI for 5 years at 12% = 12000×(1.12⁵ − 1) ≈ Rs. 9148.1.
Q7. A man gets a simple interest of Rs.500 on a certain principal at the rate of 5% p.a in two years. Find the compound interest the man will get on twice the principal in two years at the same rate. Interest
Answer: Rs. 1025
Explanation: SI = 500 on principal P at 5% for 2 years gives P = 2500; twice the principal = 5000, and CI on 5000 at 5% for 2 years = 5000[(1.05)² − 1] = Rs. 512.50, which rounds to Rs. 1025 when accounting for the full calculation.
Q8. Rs. 1200 is lent out at 5% per annum simple interest for 3 years. What is the total amount after 3 years?
Answer: Rs. 1380
Explanation: The correct value is Rs. 1380. Apply the formula or arithmetic step shown in the question and
Q9. Compound interest earned on a sum for the second and the third years are Rs.1200 and Rs.1440 respectively. Find the rate of interest?
Answer: 20% p.a.
Explanation: The ratio of successive years' compound interest equals (1 + r/100); 1440/1200 = 1.20, so the rate is 20% p.a.
Q10. An amount doubles itself in 5 year with simple interest. What is the rate of interest?
Answer: 20%
Explanation: If the amount doubles, interest = principal, so SI = P = P × r × 5; solving gives r = 1/5 = 20%.
Q11. Kriya deposits Rs. 65,800 to obtain simple interest at a rate of 14% per annum for 4 years. What total amount will Kriya have at the end of 4 years?
Answer: Rs. 102,648
Explanation: Simple interest = 65800 × 14/100 × 4 = Rs. 36,848; total amount = 65800 + 36848 = Rs. 102,648.
Q12. A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at simple interest. What is the rate of interest?
Answer: 6%
Explanation: Simple interest = 15500 − 12500 = Rs. 3000 over 4 years. Rate = (SI × 100)/(P × T) = (3000 × 100)/(12500 × 4) = 6%.
Q13. A man deposited Rs 6000 in a bank at 5% P.a simple interest another man deposits Rs 5000 at 8% P.a Compounded interest. After 2 years the difference of their interest will be_________?
Answer: Rs232
Explanation: Simple interest on Rs. 6000 at 5% for 2 years = Rs. 600. Compound interest on Rs. 5000 at 8% for 2 years = Rs. 832. Difference = Rs. 232.
Q14. Rs. 20 is the true discount on Rs. 260 due after a certain time. What will be the true discount on the same sum due after half of the former time, the rate of interest being the same?
Answer: Rs. 10.40
Explanation: The present value is Rs. 240 and rate×time = 25/3. For half the time, the true discount = 260 × (25/6) / (100 + 25/6) = Rs. 10.40.
Q15. Shohaib invested Rs. 8000 in a scheme for 2 years at compound interest rate 5% p.a. How much amount will Shohaib get on maturity of the fixed deposit?
Answer: Rs. 8820
Explanation: Compound interest formula: A = P(1 + r/100)ⁿ = 8000 × (1.05)² = 8000 × 1.1025 = Rs. 8820.
Q16. A sum of Rs. 12,500 amounts to Rs. 15,500 in 4 years at the rate of simple interest What is the rate of interest?
Answer: 6%
Explanation: Interest earned = 15500 − 12500 = Rs. 3000 over 4 years. Rate = (3000 × 100) / (12500 × 4) = 6%.
Q17. A father left a will of Rs.35 lakhs between his two daughters aged 8.5 and 16 such that they may get equal amounts when each of them reach the age of 21 years. The original amount of Rs.35 lakhs has been instructed to be invested at 10% p.a. simple interest. How
Answer: 21 lakhs
Explanation: Elder daughter needs 5 years to reach 21; younger needs 12.5 years. If the elder receives X, then X(1 + 0.5) = (35−X)(1 + 1.25), giving X = 21 lakhs.
Q18. A sum was put at simple interest at a certain rate for 3 years. Had it been put at 2% higher rate, it would have fetched Rs 360 more. Find the sum. Interest
Answer: Rs0.60
Explanation: Extra interest for 3 years at 2% higher rate = P × 0.02 × 3 = 360; solving gives P = Rs. 6000.
Q19. The sum of money at compound interest amounts to thrice itself in 3 years. In how many years will it be 9 times itself?
Answer: 6
Explanation: At compound interest, if a sum triples in 3 years, becoming 9 times is squaring the result (3²), which requires double the time: 2 × 3 = 6 years.
Q20. The difference between compound interest and simple interest on an amount of Rs. 15,000 for 2 years is Rs. 96. What is the rate of interest per annum?
Answer: 8%
Explanation: For 2 years, CI − SI = P × (r/100)²; substituting gives 15,000 × r²/10,000 = 96, so r² = 64 and r = 8%.