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Hyderabad: This article is in continuation to the last article on preparation for the Sub-Inspector of Police recruitment exam. Here are some practice questions and answers along with explanations on the Simple Interest and Compound Interest topic. 1. If Rs 5,800 are divided into two parts, such that the simple interest obtained on the first […]

Hyderabad: This article is in continuation to the last article on preparation for the Sub-Inspector of Police recruitment exam. Here are some practice questions and answers along with explanations on the Simple Interest and Compound Interest topic.

1. If Rs 5,800 are divided into two parts, such that the simple interest obtained on the first part at the rate of 7% p.a. for a period of two years is equal to the simple interest earned on the second part at the rate of 5% for the period of three years, what is the first part?
A. Rs 1400 B. Rs 2800 C. Rs 3000 D. Rs 3200
Ans: C
Explanation:
Let the amount 5800 divided into X, (5800-X)

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As given the S.I are equal then,

X× 7/100 ×2= (5800-X) × 5/100 ×3

14X/100= 5800 x 15) /100 – 15x
29X=5800×15

X=3000
2. At simple interest, a sum amounts to Rs 3360 in 6 years and to Rs 3400 in 7 years. What does it amount to in 9 years?

A. 3600 B. 3500 C. 3480 D. 3450

Ans: C

Explanation:

Difference between the amounts in one year= 3400-3360= 40
Therefore Interest in 1 year= Rs. 40
Amount in 7th year=3400
Amount in 9th year= 3400 interest in two years

= 3400 80=Rs 3480

3. The sum of money doubles itself at simple interest in 10 years. The number of years it would triple itself is
A. 25 yrs B. 15 yrs C. 20 yrs D. 22 yrs
Ans: C

Explanation:

Given that sum of money doubles itself in 10 years
Therefore, Rate of interest = 10/100 x 100 = 10%
So the sum of money triple itself after the interest becomes 200%

No. of years=200/10= 20 years
4. The present worth of Rs 169 due in 2 years at 4% per annum compound interest is

A. Rs 150.50 B. Rs 154.75 C. Rs 156.25 D Rs.158

Ans: C
Explanation:
Amount A= P (1 R/100)t

169=p (1 4/100) 2 = p (26/25)2
P= 169× 625/ 676 = 156.25

5. The CI on Rs 4000 for 6 months at 12% p.a. compounded quarterly is
A. Rs 243.60 B. Rs 240 C. Rs 243 D Rs 243.50
Ans: A

Explanation:

Let P = Principal, R = Rate of Interest per annum, Time = T in years,
Amount = A and
If the interest is compounded quarterly then A = P(1 R/4 /100)4t
Here p=4000, R= 12%, T=1/2

A = 4000(1 3/100 ) 4× (1/2) = 4000× (103/100)2=
4000× 103×103/100x 100 =4243.6

Interest= amount- principal= 4243.6-4000=Rs 243.6
6. What would be the compound interest on Rs.80,000 for a period of two years at the rate of 20% p.a. compounded six monthly?
A. Rs 37,128 B. Rs 40,000 C. Rs 35,000 D. Rs 31,728
Ans: A
Explanation:
A = P (1 R/100 )t

P=80000, t=2, R=20%
Amount= 80000(1 10/100 ) 4

80000(11/10)4= 80000× 11/10 x 11/10 x 11/10 x 11/10 =117128

Interest= amount- principal=117128-80000=Rs 37128
To be continued…
By Banda Ravipal Reddy
Director, SIGMA

Sai Institute of General Mental Ability

Hyderabad