Practice Simple & Compound Interest MCQs for Punjab Police Constable (BS-5) Mathematics — topic-wise sets with solved answers.
Q1. What will be ratio of simple to compound interest on two same sums invested in SBP at rate of interest of 8% kept for 3 years?
Answer: 1875/2029
Explanation: SI for 3 years at 8% = 0.24P; CI = P((1.08)³ − 1) ≈ 0.259712P; ratio SI:CI = 2400:2597.12 ≈ 1875:2029.
Q2. The compound interest earned by Sunil on a certain amount at the end of two years at the rate of 8% p.a. was Rs.2828.80. Find the total amount that Sunil got back at the end of two years in the form of principal plus interest earned.
Answer: Rs.19,828.80
Explanation: CI = P((1.08)² − 1) = 0.1664P = 2828.80 → P = Rs.17,000; total amount = 17000 + 2828.80 = Rs.19,828.80.
Q3. The present worth of Rs. 1404 due in two equal half-yearly installments at 8% per annum simple interest is:
Answer: Rs. 1325
Explanation: PW of first installment (702 in 6 months at 4%) = 702/1.04 = 675; PW of second (702 in 12 months at 8%) = 702/1.08 = 650; total = Rs.1,325.
Q4. Sehar gave Shazia Rs.1250 on compound interest for 2 years at 4% per annum. How much loss would Sehar has suffered had she given it to Shazia for 2 years at 4% per annum simple interest?
Answer: Rs0.20
Explanation: CI = 1250×(1.04)² − 1250 = Rs.102; SI = 1250×0.04×2 = Rs.100; loss = Rs.2.
Q5. What is the present worth of Rs. 132 due in 2 years at 5% simple interest per annum?
Answer: Rs. 120
Explanation: PW = 132/(1 + 0.05×2) = 132/1.10 = Rs.120. Show the calculation clearly when solving similar quantitative items.
Q6. The difference between simple and compound interest on Rs. 1200 for one year at 10% per annum reckoned half-yearly is________?
Answer: Rs. 3
Explanation: SI = Rs.120; CI (half-yearly, 5% per period, 2 periods) = 1200 × 0.1025 = Rs.123; difference = Rs.3.
Q7. A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. What is the principal sum?
Answer: Rs. 698
Explanation: Annual SI = Rs.854 − Rs.815 = Rs.39; principal = 815 − 3×39 = Rs.698.
Q8. A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is ________?
Answer: Rs. 698
Explanation: Annual SI = Rs.854 − Rs.815 = Rs.39; principal = 815 − 3×39 = Rs.698.
Q9. If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same sum at the rate and for the same time?
Answer: Rs. 51.25
Explanation: SI = Rs. 50 on 2 years at 5%, so principal = Rs. 500; CI = 500×((1.05)²−1) = 500×0.1025 = Rs. 51.25.
Q10. Difference between the compound interest and simple interest accrued in 2 years at 6% per annum is Rs. 144. What is the principal amount?
Answer: Rs. 40000
Explanation: Difference between CI and SI for 2 years = P×(r/100)²; at 6%: P×0.0036 = 144 → P = Rs. 40000.
Q11. If the interest on Rs 800 is more than the interest on Rs 400 by Rs 40 in 2 years, then the rate of interest per annum is:
Answer: 5%
Explanation: The correct value is 5%. Apply the formula or arithmetic step shown in the question and
Q12. The C.I. on a certain sum for 2 years Rs.41 and the simple interest is Rs.40. What is the rate percent?
Answer: 5%
Explanation: Difference CI−SI for 2 years = P×(r/100)²; SI for 2 years = 2×(P×r/100); ratio: difference/SI = r/200 = 1/40, so r = 5%.
Q13. The Compound interest on Rs 16000 for 9 months at 20% P.a compounded quarterly is:__________?
Answer: Rs2,522
Explanation: Rate per quarter = 5%; 9 months = 3 quarters; amount = 16000×(1.05)³ = 18522; CI = Rs. 2522.
Q14. A lends Rs. 1500 to B and a certain sum to C at the same time at 8% per annum simple interest. If after 4 years, A altogether receives Rs. 1400 as interest from B and C, then the sum lent to C is________?
Answer: Rs0.29
Explanation: Interest from B = 1500×8%×4 = Rs. 480; interest from C = 1400−480 = 920; principal for C = 920×100/(8×4) = Rs. 2875 ≈ Rs. 2900.
Q15. If the simple interest on a certain sum of money after 3 1⁄8 years is 1⁄4 of the principal, what is the rate of interest per annum?
Answer: 8%
Explanation: SI = P×r×t; P/4 = P×r×(25/8); r = (1/4)×(8/25) = 2/25 = 8%.
Q16. What will be the compound interest on a sum of Rs. 1,875 after 2 years if the rate of interest for the first year is 4% and for the second year is 8%?
Answer: 231
Explanation: The correct value is 231. Apply the formula or arithmetic step shown in the question and
Q17. A money lender borrows money at 4% P.a and pays interest at the end of the year. He lends it at 6% P.a compound interest compounded half-yearly and receives the interest at the end of the year. Thus be gains Rs 104.50 a year. The amount of money he borrows
Answer: Rs5,000
Explanation: 6% p.a. compounded half-yearly for 1 year gives (1.03)²−1 = 6.09%; gain per rupee = 6.09%−4% = 2.09%; 104.50/0.0209 = Rs. 5000.
Q18. A sum of Rs.4800 is invested at a compound interest for three years, the rate of interest being 10% p.a., 20% p.a. and 25% p.a. for the 1st, 2nd and the 3rd years respectively. Find the interest received at the end of the three years.
Answer: Rs0.31
Explanation: 4800×1.10×1.20×1.25 = 7920; CI = 7920−4800 = Rs. 3120 ≈ Rs. 3100.
Q19. Rs. 800 amounts to Rs. 920 in 3 years at simple interest. If the interest rate is increased by 3%, it would amount to how much?
Answer: Rs. 992
Explanation: Original rate = 120/(800×3)×100 = 5%; new rate = 8%; new interest = 800×8%×3 = 192; amount = 800+192 = Rs. 992.
Q20. If an investment of Rs. 4 grows to Rs. 10 in 50 years at simple interest, what is the annual rate of interest?
Answer: 3%
Explanation: The correct value is 3%. Apply the formula or arithmetic step shown in the question and
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