# Compound Interest

• The compound interest on a certain sum for 2 years is Rs. 786 and S.I. is Rs. 750. If the sum is invested such that the S.I. is Rs. 1296 and the number of years is equal to the rate per cent per annum, Find the rate of interest?
A.4%
B.5%
C.6%
D.8%
E.2%

Explanation :
CI for 2 years = Rs. 786
SI for 2 years = Rs. 750
36/360 * 100 = 10%
P for first year = 3600
P*x*x/100 = 1296
x = 6%
• Hari took an educational loan from a nationalized bank for his 2 years course of MBA. He took the loan of Rs.5 lakh such that he would be charged at 7% p.a. at CI during his course and at 9% CI after the completion of the course. He returned half of the amount which he had to be paid on the completion of his studies and remaining after 2 years. What is the total amount returned by Hari?
A.Rs. 626255
B.Rs. 626277
C.Rs. 616266
D.Rs. 626288
E.None of these

Explanation :
5,00,000 * (1.07)² = 572450
Returned amount = 286225
After two years = 286225 * (1.09)² = 340063
Total amount = 286225 + 340063 = 626288
• Rs.20,000 was invested by Mahesh in a FD @ 10% pa at CI. However every year he has to pay 20% tax on the CI. How much money does Mahesh have after 3 years?
A. 25694
B. 25594
C. 25394
D. 25194
E.None of these

Explanation :
(20000*(1.08)³)=25194
• Leela takes a loan of Rs. 8400 at 10% p.a. compounded annually which is to be repaid in two equal annual installments. One at the end of one year and the other at the end of the second year. The value of each installment is?
A. 4200
B. 4140
C. 4840
D. 5640
E. None of these

Explanation :
8400 = x*(210/121) => 4840
• A sum of money lent at compound interest for 2 years at 20% per annum would fetch Rs.723 more, if the interest was payable half yearly than if it was payable annually. The sum is ____
A.Rs. 20000
B.Rs. 15000
C.Rs. 30000
D.Rs. 45000
E.None of these

Explanation :
sum – Rs.x
C.I. compounded half yearly = (4641/10000)x
C.I. compounded annually = (11/25)x
(4641/10000)x – (11/25)x = 723
x = 30000
• A sum of Rs.7140 is to be divided between Anita and Bala who are respectively 18 and 19 yr old, in such a way that if their shares will be invested at 4% per annum at compound interest, they will receive equal amounts on attaining the age of 21 year. The present share of Anita is
A. 4225
B. 4352
C. 3500
D. 4000
E. None of these

Explanation :
Amount got by Anita after 3 yr = Amount got by Bala after 2 yr
x*(26/25)³ = (7140 – x)*(26/25)
26/25 = 7140 – x / x
x = 3500
• Suresh borrows Rs.6375 to be paid back with compound interest at the rate of 4 % pa by the end of 2 year in two equal yearly installments. How much will each installment will be?
A.3840
B.3380
C.4800
E.None of these

Explanation :
25x/26 + 625/676x  = 6375
x = (6375 * 676)/1275 = 3380
• A sum of Rs. 8400 was taken as loan. This is to be paid in two equal annual installments. If the rate of interest be 20% compounded annually, then the value of each installment is
A. 5400
B. 5700
C. 5100
D. 5200
E. None of these

Explanation :
Let value of each installment be X.
X/(1 + 20/100) + X/(1 + 20/100)² = 8400
⇒ X(5/6 + 25/36) = 8400
⇒ X(56/36) = 8400
X = 5400
• During the first year the population of a village is increased by 5% and the second year it is diminished by 5%. At the end of the second year its population was 31500. What was the population at the beginning of the first year?
A. 35500
B. 31578
C. 33500
D. 33000
E. None of these

Explanation :
x * 105/100 * 95/100 = 31500
x = 31500 * 100/105 * 100/95
D = 31578
• If Rs. 7200 amounts to Rs.10368 at compound interest in a certain time , then Rs. 7200 amounts to what in half of the time?
A. 8640
B. 8600
C. 8800
D. 8520
E. None of these