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CompoundinterestdiffersfromSimpleinterestastheinterestsearnedinthepreviousyearsconsideredas
principalforthenextyears.Observethetable

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Fromtheabovetable,wecanseethatinSimpleinterestcase,Interestsearnedineachyearissame,butinthe
compoundinterest,exceptforthefirstyear,interestsaredifferent.ThisisduetothefactthatintheCIcase
interestearnedinthe1styearisconsideredasprincipalandinterestwillbecalculatedonthistoo.Inthefirstbox
10+1canbeexplainedas10istheinterestontheprincipal,1istheinterestonthefirstyearinterest.Forthe2nd
box,10istheinterestonprincipal,1isinterestonfirstyearinterest,another1isinteretonsecondyear10,and0.1
istheintereston1.

1k

Like

4.6k

ThereisnodirectformulaforCompoundinterestbutP 1 +

R
100

givesustheAmountwhichincludesprincipalas

wellasinterest.Sotofindtheinterestweneedtosubstractprincipalfromtheamount.
CI=AP
CompoundinterestthroughPascalTriangle:
FindthecompoundinterestonRs.6000attherate10%perannumfor3years.

(
( )

Formula:A=P 1 +
6000

11
10

R
100

=6000 1 +

10
100

=7986

CompoundInterest=79866000=1986
Alternatemethod:
Wecansolvecompoundinterestproblemseasilywiththeuseofpascaltriangle.

Tosolveaboveproblem,weneedtoidentifythecoefficientswhere3appearsfirsttimeinarow.Weknowthatin
4throw3appers.Weneedtotakecoefficientsexcluding1.i.e.,3,3,1.Now

CI=3X(10%of6000)+3X(10%of600)+1X(10%of60)=1986

Tofindthedifferencebetweencompoundinterestandsimpleinterestfortwoyears:
Compoundinterestfortwoyears=P(1 + r) 2P
Simpleinterestfortwoyears=Pxrx2=2Pr
Rateofinterest
Here,r=
100
=[P(1 + r) 2P](2Pr)
=P(1+2r+r 2)P(2Pr)
=P+2Pr+Pr 2P2Pr=Pr 2
Hence,differencebetweencompoundinterestandsimpleinterest@r%p.a.fortwoyears=P(r 2)
Difference=Principalx

( )
Rate

100

TofindthedifferencebetweenCompoundInterestandSimpleinterest,whenSimpleInterestfor2years
isgiven:
Differencebetweencompoundinterestandsimpleinterestfor2years=P(r 2)=Pr(r)
Rate
But,Pr=Principalx
=SimpleInterestforoneyear
100
1
= xTotalSimpleInterest
2
Therefore,Differencebetweencompoundinterestandsimpleinterestfor2years
1
=Pr(r)= xSimpleInterestx(r)
2
1
= rofSimpleInterest
2
1
For2years: rofsimpleinterest
2
AlternateMethod:
Withouttheabovederivation,wecancalculatethedifferencebyusingthereasoninggivenbelow.
WeknowthatCompoundinterestforfirstyear=SimpleInterestforoneyear
CompoundInterestforsecondyear=SimpleInterestforoneyear+InterestonSimpleInterestforthefirstyear
(havealookatthetable)
ThereforeDifference=InterestonSimpleinterestoffirstyear

Tofindthedifferencebetweencompoundinterestandsimpleinterestforthreeyears:
[P(1 + r) 3 P] P 3 r
[P(1 + 3r + 3r 2 + r 3) P] P 3 r
3Pr 2+ Pr 3
Pr(3r + r 2)
Differencefor3years=Pr 2(3+r)
TofindthedifferencebetweenCompoundInterestandSimpleinterest,whenSimpleInterestfor3years
isgiven:
1
For3years: r(3+r)ofsimpleinterest
3
Rateofinterest
Note:'r'is
100
Differencebetweencompoundinterestandsimpleinterestfor3years=Pr 2(3+r)=Pr(r)(3+r)
Rate
Now,Pr=Principalx
=SimpleInterestforoneyear
100
1
= xTotalSimpleInterest
3
Therefore,Differencebetweencompoundinterestandsimpleinterestfor3years
1
=Pr(r)(3+r)= xSimpleInterestx(r)(3+r)
3
1
= r(3+r)ofSimpleInterest
3
Tofindsimpleinterestwhencompoundinterestisgiven?Ifdifferencebetweencompoundinterestandsimple
1
1
interestis ofSimpleinterestThen,differencebetweencompoundinterestandsimpleinterestis
of
x
x1
CompoundInterest.
Hint:CompoundInterestismorethanSimpleInterest.
And,CompoundInterest=SimpleInterest+Difference
Therefore,IfweshiftfromSimpleInteresttoCompoundInterest,smallerfractionisrequiredandviceversa.
TofindCompoundInterestfortwoyears,whenSimpleinterestisgiven:
CompoundInterest=TotalSimpleinterest+(SimpleinterestforoneyearxRateofInterest)

Practiceproblems
1.FindtheamountforRs.6000at10%perannum,compoundedsemiannuallyfor2years.Heren=2yearsx2=
4periods
Similarly,R=

10
2

=5%(forhalfyear)

P=6,000

A=6,000 1 +

5
100

=Rs.7,293

Interest=Rs.72936000=1293
Alternatemethod:
Usingpascaltriangle:thecoefficientsare4,6,4,1for4years.

=4X(300)+6X(15)+4X(.75)+()=1293
Wecanstopafterusing3coefficientsasthe4thcoefficientmultipleistoosmallandmaynotcauseanybig
differenceinouranswer.
2.ThedifferencebetweentheCIandSIonacertainamountat10%perannumfor2years,compounded
annuallyisRs.372.Findtheprincipal.
Lettheprincipalbea.
SI=

a 2 10
100

a
5

andCI=Amounta=a 1 +

CISI=Rs.372
21
a

a =Rs.372
100
5
a=Rs.37,200

10
100

a=

21
100

Alternatemethod:
Weknowthatthedifferenceininterestcomesfromsecondyear.AssumeprincipalisRs.100thenInterestsare
calculatedasbelow.

NowthedifferenceisRs.1butactuallyitwasgivenasRs.372.IfprincipalisRs.100differenceisRs.1,whatisthe
principalifdifferencehastobeRs.372
372

100 = 37200
1
Alternatemethod:
Theaboveproblemhasanalternatemethod.Youneedtounderstandthefactthatfor1stperiod,SI=CI.

The difference between the values of CI and SI is because of accumulated interest building on interest which is
reinvested.Therefore,forperiod2,thedifferencebetweenCIandSIistheinterestfor1periodontheinterestof
period1.
Intheaboveexample,thedifferencebeing372istheinterestgeneratedoninterestforperiod1ontheprincipal.

Interestforperiod1=Rs.372

100

=Rs.3,720
10
100
Therefore,principal=Rs.3,720
=Rs.37,200.
10
3.FindcompoundinterestonRs.10000at10%p.a.for4years,ifinterestiscompoundedannually.
Amount=Rs.10000x

( )
11
10

=14641

Therefore,Compoundinterest=Rs.14641Rs.10000=Rs.4641

Note:Stepsforcalculationof11 4 :
11x11=121121x11=13311331x11=14641
ApproximateMethod:
Weknowthat,
Compoundinterest=Simpleinterest+Interestonsimpleinterest
1
Simpleinterest=10000x x4=Rs.4000
10
Therefore,Simpleinterestforoneyear=Rs.4000 4=Rs.1000.
Therefore,Interestoninterest
=0+10%ofRs.1000+10%ofRs.2000+10%ofRs.3000+interestoninterest
=0+100+200+300+interestonthisamount
=600+interestonthisamount
Therefore,Compoundinterest=Rs.4000+Rs.600+interestonRs.600=Rs.4600+InterestonRs.600
Outofgivenoptions,amountnearesttoitisRs.4641.
4.Ifacertainsumofmoneyinvestedatacertainrateofcompoundinterestdoublesin5years.Inhowmanyyears
willitbecome4times?.
Since,2 2 = 4.
Therefore,Theamountwillbecome4timesin2x5=10years.
5.Atwhatratepercentofcompoundinterest,asumofRs.2000willamounttoRs.2662in3years?

Weknowthat, 1 +

Rate
100

Therefore,(1 + r) 3 =
Therefore,1+r=
Therefore,r=

11
10

2662
2000

Time

Amount
Principal

1331
1000

( )
11

10

11
10

1 =

1
10

=10%

6.AmaninvestedRs.16000atcompoundinterestfor3years,interestcompoundedannually.IfhegotRs.18522
attheendof3years,whatisrateofinterest?

Here,(1 + r) 3 =

18522
16000

9261
8000

Therefore,Rateofinterest=

( ) ( )
21

=
1

20

20

= 1+

20

=5%

'ApproximateMethod':
Compoundinterest=Rs.18522Rs.16000=Rs.2522
Let,theamountisinvestedat1%p.a.simpleinterest.
Then,simpleinterestof3years=16000x1%x3=Rs.480
2522
Therefore,Rateofinterest=
=5+(RemainderisRs.122)
480
Weknowthatcompoundinterestismorethansimpleinterest.
Note:IfRateis6%,thensimpleinterest=480x6=2880,whichismorethanthegivencompoundinterestwhichis
notpossible.
Therefore,Rateofinterest 6%isnotpossible.
Therefore,Rateofinterestis5%p.a.
7.AsumofmoneyamountstoRs.2880in2yearsand3456in3yearsatcompoundinterest.Findthesum.
Rs.2880amountstoRs.3456inoneyear.
3456 6
Thesumamountsto
= timesofitself
2880 5
Therefore,Principal=2880

()
6
5

= 2880

5
6

5
6

=Rs.2000

8.AmanborrowsRs.2100andundertakestopaybackwithcompoundinterest@10%p.a.in2equalyearly
1
11
installmentsattheendoffirstandsecondyear.Whatistheamountofeachinstallment?Here,(1+r)=1+
=
10 10
10
Ratioofprincipalsoftwoinstalments=1: =11:10
11
Sumofratios=11+10=21
11
Therefore,Principaloffirstinstalment=2100x =Rs.1100
21
Therefore,Instalment=Principaloffirstinstalmentx(1+r)
11
=1100x =Rs.1210
10

9.AmanborrowsRs.820andundertakestopaybackwithcompoundinterest@5%p.a.in2equalyearly
instalmentsattheendoffirstandsecondyear.Whatistheamountofeachinstallment?
1
21
Here,(1+r)=1+
=
20 20
20
Ratioofprincipalsoftwoinstalments=1: =21:20
21
Sumofratios=21+20=41
21
Therefore,Principaloffirstinstalment= x820=Rs.420
41
21
Therefore,Instalment=Principaloffirstinstalmentx(1+r)=420x =Rs.441
20
10.AmanborrowsRs.1820andundertakestopaybackwithcompoundinterest@20%p.a.in3equalyearly
installmentsattheendoffirst,secondandthirdyears.Whatistheamountofeachinstallment?
1 6
Here,(1+r)=1+ =
5 5

()

5 5
Ratioofprincipalsforthreeyears=1: :
6 6

=6 2:6x5:5 2(Onmultiplyingeachratioby6 2)
=36:30:25
Sumoftheratios=36+30+25=91
Therefore,Principaloffirstinstallment=

36
91

x1820=Rs.720

6
Therefore,Installment=Principaloffirstinstallmentx(1+r)=720x =Rs.864
5
11.AcertainsumistobedividedbetweenAandBsothatafter5yearstheamountreceivedbyAisequaltothe
amountreceivedbyBafter7years.Therateofinterestis10%,interestcompoundedannually.Findtheratioof
amountsinvestedbythem.
Letthesum(principal)receivedbyAandBarexandy.
1
11
(1+r)=1+
=
10 10
Then,

x
y

( ) ( )
11
10

7 5

11
10

121
100

Hence,theratioinwhichthesumisdivided=121:100.
12.AfatherwantstodivideRs.5100betweenhistwosons,MohanandSohanwhoare23and24atpresent.

Dividetheamountinsuchawaythatiftheirsharesareinvestedatcompoundinterest@4%p.a.theywillreceive
equalamountonattainingtheageof26years.FindMohan'sshare.
Let,MohanandSohanreceivesRs.xandRs.yrespectivelyatpresent.
1
26
(1+r)=1+
=
25 25

( ) ( )

x
26
Then, =
y
25

2 3

26

25

Therefore,Mohan'sshare=

25
51

25
26

xRs.5100=Rs.2500

13.FindthedifferencebetweenCompoundInterestandSimpleInterestonRs.4000for1yearat10%p.a.,ifthe
interestiscompoundedhalfyearly.
Since,interestiscompoundedhalfyearly.Therefore,Rateofinterestishalvedandtimeisdoubled.Therefore,
10
1
Rate= %=5%=
2
20
And,Time=2x1=2halfyears.
1
1
Therefore,DifferencebetweenCompoundInterestandSimpleInterest=Rs.4000x x =Rs.10
20
20
14.FindthedifferencebetweenCompoundedInterestandSimpleInterestonRs.1000for3yearsat10%p.a.,if
interestiscompoundedannually.
DifferencebetweenCompoundInterestandSimpleInterestfor3years=Pr 2(3+r)=Rs.1000x

( )
3+

10

1
10

1
10

=Rs.31

15.FindthedifferencebetweenCompoundInterestandSimpleInterestonRs.10000for4yearsat10%p.a.,if
interestiscompoundedannually.
DifferencebetweenCompoundInterestandSimpleInterestfor4years=Pr 2(6+4r+r 2)=10000x

6+

4
10

1
10

100
1
641
=10000x

=Rs.641
100 100
16.IfCompoundInterestonacertainsumfor2years@5%p.a.isRs.328,theSimpleinterestwillbe?

1
10

Suppose,CompoundInterestforfirstyear=Rs.100
Then,CompoundInterestforsecondyear=Rs.105
TotalCompoundInterestfortwoyears=(Rs.100+Rs.105)=Rs.205
AndSimpleInterestfortwoyears=2xRs.100=Rs.200
IfCompoundInterestisRs.205,SimpleInterest=Rs.200
IfCompoundInterestisRs.328,SimpleInterest=Rs.328x

200
205

=Rs.320
AlternativeMethod:
1
Rate=5%=
20
DifferencebetweenCompoundinterestandSimpleinterest
1
1
1
=
=
ofsimpleinterest
2 20 40
1
1
= ofthecompoundinterest= xRs.328=Rs.8
41
41
Therefore,Simpleinterest=CompoundedinterestDifference
=Rs.328Rs.8=Rs.320

17.Ifacertainsumofmoneyinvestedatacertainrateofcompoundinterestdoublesin6years.Inhowmany
yearswillitbecome8times?
Solution:
Since,2 3=8.
Therefore,Theamountwillbecome8timesin3x6=18years.
MCQ's
1.AsumofmoneybecomesRs.6690afterthreeyearsandRs.10,035after6yearsoncompoundinterest.The
sumis:
a.Rs.4400
b.Rs.4445
c.Rs.4460
d.Rs.4520

CorrectOption:C
Explanation:
LetthesumbeP.

100

andP 1 +

Then,P 1 +

100

= 6690.........(i)

= 10, 035.....(ii)

Dividing(ii)by(i),weget

1+

R
100

P= 6690

10035

6690

3
2

=Rs.4460

2.Rs.1600at10%perannumcompoundinterestcompoundhalfyearlyamounttoRs.1944.81in
a.2years
b.3years
1
c..1 years
2
1
d.2 years
2
CorrectOption:A
Explanation:

1600 1 +

= 1944.81

( )
( ) ( )

100

21
20

441

400

1944.81
1600.00
21

194481
160000

20

T=4(Halfyears)orT=2years
3.Thedifferencebetweensimpleinterestandcompoundinterestonasumfor2yearsat8%,whentheinterestis
compoundedannuallyRs.16.Iftheinterestwascompoundedhalfyearly,thedifferenceintwointerestswouldbe
nearly:
a.Rs.16

b.Rs.16.80
c.Rs.21.85
d.Rs.24.64
CorrectOption:D
Explanation:
ForIstyear,S.I=C.I
Thus,Rs.16istheS.IonS.Ifor1year,whichat8%isthusRs.200
i.e.S.Iontheprincipalfor1yearisRs.200
Principal=Rs.

100 200
81

= Rs.2500

Amountfor2years,compoundedhalfyearly

=Rs. 2500 1 +

4
100

)]
4

=Rs.2924.64

C.I=Rs.424.64
Also,S.I=Rs.

2500 8 2
100

=Rs.400

Hence,[(C.I)(S.I)]=Rs.(424.64400)=Rs.24.64
4.ThedifferenceinC.IandS.Ifor2yearsonasumofmoneyisRs.160.IftheS.Ifor2yearsbeRs.2880,therate
percentis:
5
a.5 %
9
1
b.12 %
2
1
c.11 %
9
d.9%
CorrectOption:C
Explanation:
S.Ifor1year=Rs.1440
S.IonRs.1440for1year=Rs.160
Hence,ratepercent=

100 160

1
=11 %
1440 1
9

5.Thevaluekofamachinedepreciateseveryyearattherateof10%onitsvalueatthebeginningofthatyear.If
thepresentvalueofthemachineisRs.729,itsworth3yearsagowas:
a.Rs.947.10
b.Rs.800
c.Rs.1000
d.Rs.750.87
CorrectOption:C
Explanation:

10

P= 1
P=Rs.

100

= 729

729 10 10 10
999

=Rs.1000

6.Theleastnumberofcompleteyearsinwhichasumofmoneyputoutat20%C.I.willbemorethandoubledis:
a.3
b.4
c.5
d.6
CorrectOption:B
Explanation:

x 1+
Now,

20
100

6
5

6
5

> 2xor

6
5

()
)

6
5

>2

>2

n=4years
7.AsumofRs.550wastakenaloan.Thisistoberepaidintwoequalannualinstalments.Iftherateofinterestbe
20%compoundedannually,thenthevalueofeachinstalmentis:
a.Rs.421
b.Rs.396
c.Rs.360
d.Rs.350

CorrectOption:C
Explanation:
LetthevalueofeachinstalmentbeRs.x.Then,
x
x
+
= 550
20
20 2
1+
1+
100
100
5x 25x
or +
= 550orx=360
6
36

) (

8.AloanwasrepaidintwoannualinstalmentsofRs.112each.Iftherateofinterestbe10%perannum
compoundedannually,thesumborrowedwas:
a.Rs.200
b.Rs.210
c.Rs.217.80
d.Rs.280
CorrectOption:B
Explanation:
Principal=(PresentvalueofRs.121due1yearhence)+(PresentvalueofRs.121due2yearshence)
121
121
=Rs.
+
=Rs.210
10
10 2
1+
1+
100
100

) (

9.AsumamountstoRs.2916in2yearsandtoRs.3149.28in3yearsatcompoundinterest.Thesumis:
a.Rs.1500
b.Rs.2000
c.Rs.2500
d.Rs.3000
CorrectOption:C
Explanation:
LetPbetheprincipalandR%perannumberate.

ThenP 1 +

R
100

=3149.28........(i)

andP 1 +

100

=2916..........(ii)

Ondividing(i)and(ii)weget

1+

R
100

3149.28

2916
233.28
233.28
or100 =
orR=
100 = 8%
2916
2916

NowP 1 +

100
27

27

orP

= 2916

= 2916
25 25
2916 25 25
orP=
=Rs.2500
27 27
10.AsumofmoneyamountstoRs.10648in3yearsandRs.9680in2years.Therateofinterestis:
a.5%
b.10%
c.15%
d.20%
CorrectOption:B
Explanation:
LetPbetheprincipalandR%annumbetherate.Then.

P 1 +

R
100

andP 1 +

= 10648...(i)

R
100

= 9680....(ii)

Ondividing(i)by(ii),wehave

1+

10648

100
9680
R
968
1
or
=
=
100 9680 10
1
orR= 100 = 10%
10
11.ThedifferencebetweensimpleinterestandcompoundinterestatthesamerateforRs.5000for2yearsis

Rs.72.Therateofinterestis:
a.10%
b.12%
c.6%
d.8%
CorrectOption:B
Explanation:

[ ( ) ]
[( ) ]
5000 1 +

5000
1+

100

5000

100

1+

R2

R2 =

100

2R
100

72
5000

R
50

5000 2 R

50

100

= 72

= 72

72
5000

10000 = 144orR=12%

12.Thecompoundinterestonacertainsumofmoneyfor2yearsat10%perannumisRs.420.Thesimpleinterest
onthesamesumatthesamerateandforthesametimewillbe:
a.Rs.350
b.Rs.375
c.Rs.380
d.Rs.400
CorrectOption:D
Explanation:

LetprincipalbeP.Then,P 1 +
S.I=Rs.

2000 2 10
100

P
100

P = 420 P=Rs.2000

=Rs.400

13.Thedifferencebetweenthecompoundinterestandsimpleinterestonacertainsumat5%perannumfor2
yearsisRs.1.50.Thesumis:
a.Rs.600

b.Rs.500
c.Rs.400
d.Rs.300
CorrectOption:A
Explanation:
LetthesumbeRs.100.Then.
S.I=Rs.

C.I=Rs.

100 5 2
100

=Rs.10

[{ ( ) } ]
100 1 +

100

100 =Rs.

DifferencebetweenC.IandS.I.=Rs.

41
4

41
4

10 =Rs.0.25

0.25:1.50::100:x
1.50 100
x=
=Rs.600
0.25
14.AsumofmoneyplacedatC.Idoublesitselfin5years.Itwillamounttoeighttimesitselfin:
a.15years
b.20years
c.12years
d.10years
CorrectOption:A
Explanation:

LettheprincipalPandrateber%.Then,2P=P 1 +

1+

r
100

=2

(
)) (

Letitbe8timesintyears.Then,8p=p 1 +

or 1 +

r
100

t=15years

=8=(2) 3=

((

1+

r
100

5 3

= 1+

r
100
r
100

)
)

15

r
100

or

15.Thesimpleinterestonacertainsumfor2yearsat10%perannumisRs.90.Thecorrespondingcompound
interestis:
a.Rs.99
b.Rs.95.60
c.Rs.94.50
d.Rs.108
CorrectOption:C
Explanation:
Sum=Rs.

100 190
2 10

C.I=Rs. 450 1 +

=Rs.450

10 2
450 =Rs.94.50
100

16.WhatistheprincipalamountwhichearnsRs.132ascompoundinterestforthesecondyearat10%perannum
?
a.Rs.1000
b.Rs.1200
c.Rs.1320
d.Noneofthese
CorrectOption:B
Explanation:
Letxbetheprincipalattheendoffirstyear.
x 10 1
Then
= 132 x = 1320
100
Letybetheoriginalprincipal
y 10 1
Then,y+
= 1320 y = 1200
100
17.AsumamountstoRs.1352in2yearsat4%compoundinterest.Thesumis:
a.Rs.1300
b.Rs.1250

c.Rs.1260
d.Rs.1200
CorrectOption:B
Explanation:

LetthesumbeP.Then,1352=P 1 +
1352 = P
P=

26

4
100

26

25 25
1352 25 25
26 26

= 1250

18.ThecompoundinterestonRs.30000at7%perannumforacertaintimeisRs.4347.Thetimeis:
a.2years
1
b.2 years
2
c.3years
d.4years
CorrectOption:A
Explanation:

(
( )

30000 1 +
or

107

100

7
100

34347
30000

= 30000 + 4347
=

11449
10000

( )
107

100

Time=2years
19.Rs.800at5%perannumcompoundinterestwillamounttoRs.882in:
a.1year
b.2years
c.3years
d.4years
CorrectOption:B
Explanation:
Lettimebetyears

882 = 800 1 +
=

5
100

( ) ( )
21
20

21

20

882
800

( )
21

20

t=2

time=2years
20.Simpleinterestonasumat4%perannumfor2yearsisRs.80.Thecompoundinterestonthesamesumfor
thesameperiodis:
a.Rs.81.60
b.Rs.160
c.Rs.1081.60
d.Noneofthese
CorrectOption:A
Explanation:
Principal=Rs.

C.I=Rs.

100 80
42

=Rs.1000

[{ ( ) }]
1000 1 +

100

1000

=Rs.81.60

21.ThedifferenceofcompoundinterestonRs.800for1yearat20%perannumwhencompoundedhalfyearly
andquarterlyis:
a.Nil
b.Rs.2.50
c.Rs.4.40
d.Rs.6.60
CorrectOption:C
Explanation:
C.Iwhenreckonedhalfyearly

[ ( ) ]

=Rs. 800 1 +

10

100

800 =Rs.172.40

Difference=Rs.(172.40168)Rs.4.40

22.ThedifferencebetweensimpleinterestandthecompoundinterestonRs.600for1yearat10%perannum,
reckonedhalfyearlyis:
a.Nil
b.Rs.6.60
c.Rs.4.40
d.Rs.1.50
CorrectOption:D
Explanation:
S.I=Rs.

600 10 1
100

C.I=Rs. 600 1 +

=Rs.60

5
100

600 =Rs.61.50

Difference=Rs.(61.5060)=Rs.1.50
1
23.ThecompoundinterestofRs.20480at6 %perannumfor2years73daysis:
4
a.Rs.3000
b.Rs.3131
c.Rs.2929
d.Rs.3636
CorrectOption:C
Explanation:
73daysis1/5thofanyear.

C.I=Rs. 20480 1 +

=Rs.

[(

20480

17
16

25

)(
)]

4 100

17
16

81
80

1+

1
5

25
4 100

)]

20480

20480=Rs.2929

1
24.ThecompoundinterestonRs.2800for1 yearsat10%perannumis:
2
a.Rs.441.35
b.Rs.436.75

c.Rs.434
d.Rs.420
CorrectOption:C
Explanation:
Amount=Rs.

=Rs. 2800

[[

(
]

2800 1 +

11
100

21
20

10
100

)](

1+

5
100

)]

=Rs.3234

C.I=Rs.(32342800)=Rs.434
25.IfRs.7500areborrowedatC.Iattherateof4%perannum,thenafter2yearstheamounttobepaidis:
a.Rs.8082
b.Rs.7800
c.Rs.8100
d.Rs.8112
CorrectOption:D
Explanation:

[ ( )] [

Amount=Rs. 7500 1 +

100

=Rs. 7500

26
25

26
25

=Rs.8112
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