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**1. What principal will yield Rs. 600 as simple interest at 12% p.a in 1 year ?**

(a) Rs. 7500

(b) Rs. 5000

(c) Rs. 10,000

(d) Rs. 8500

Let Principal be : P. So, 1 year Interest @12% pa=

So, option **(b)** is correct

**2. What principal will yield Rs. 120 as simple interest at 6% p.a. in 10 years ?**

(a) Rs. 300

(b) Rs. 225

(c) Rs. 175

(d) Rs. 200

Let principal be P. Simple interest @ 6% for 10 years

So, option **(d)** is correct

**3. At the rate of 6% p.a. simple interest, a sum of Rs. 2500 will earn how much interest by the end of 5 years ?**

(a) Rs. 250

(b) Rs. 500

(c) Rs. 750

(d) Rs. 1000

Principal = 2500. Simple interest rate 6% p.a. for 5 years

So, option **(c)** is correct

**4. Rs. 8000 becomes Rs. 10000 in two years at simple interest. The amount that will become Rs. 6875 in 3 years at the same rate of interest is**

(a) Rs. 6000

(b) Rs. 5000

(c) Rs. 7200

(d) Rs. 8250

Rs. 8000 become Rs. 10,000 in two years simple interest. So, So, Total 2 years simple interest = 10,000 – 8000 = 2000. 1 year Interest = 2000/2=1000. So, Rate of Simple Interest= (1000 / 8000) X 100% = 12.50%. Let us assume Rs P will grow to 6875 in 3 years at same rate of interest.

So, option **(b)** is correct

**5. A sum was put at a certain rate of interest for 3 years. Had it been put at 2% higher rate, it would have fetched Rs. 72 more. The sum is**

(a) Rs. 2250

(b) Rs. 2100

(c) Rs. 1200

(d) Rs. 2700

Let the principal is P. Interest @2% for 3 years

So, option **(c)** is correct

**6. Rs. 2000 amounts to Rs. 2600 in 5 years at simple interest. If the interest rate is increased by 3 % it would amount to**

(a) Rs. 2900

(b) Rs. 3700

(c) Rs. 4200

(d) Rs. 2300

So, at 3% higher interest rates. 2000 amounts to (2600 + 300) = 2900. So, option **(a)** is correct

**7. If the interest is compounded annually, the compound interest on Rs. 2000 for 3 years at 10% per annum is**

(a) Rs. 481

(b) Rs. 662

(c) Rs. 766

(d) Rs. 601

For compound interest, A = P (1 + i)^{n} . So, 2000 @10% pa Compound Interest for 3 years would become = 2000 X ( 1 + 0.10)^{3} = 2000 X (1.10)^{3} = 2000 x 1.331 = 2662. So, the Interest is 2662-2000 – 262. So, option **(b)** is correct

**8. The difference between ****C****. ****I. ****and ****S****. ****I.**** ****on Rs. 2500 for 2 years at 4% p.a is**** **

(a) Rs. 12

(b) Rs. 10

(c) Rs. 4

(d) Rs. 7

So, A = 2500 (1 + 0.04)^{2} = = 2500 (1.04)^{2} = = 2500 x 1.0816 = 2704

Compound interest = 2704 – 2500 = 204, Simple Interest on 2500 @ 4% pa = 2500 X .04 X 2 = 200

So, Different between compound interest and simple interest = 204 – 200 = 4. So, option **(c)** is correct

**9. The amount of Rs. 7500 at compound interest at 4% per annum for 2 years is**

(a) Rs. 7300

(b) Rs. 6400

(c) Rs. 8112

(d) Rs. 6120

So, A = 7500 (1 + 0.04)^{2} = 7500 (1.04)^{2} = = 7500 x 1.0816 = 8112. So, option **(c)** is correct

**10. The simple interest is equal to compound interest for a certain sum when**

(a) rate is same

(b) time is same

(c) interest is computed annually and time is one year

(d) All of above.

For Compound Interest : A = P (1 + i)^{n} . For Simple interest A= P+ PX i = P(1+i). For n=1, for Compound Interest : A = P (1 + i)^{n} = P(1+i). So, Simple interest and compound interest will be same for investment period of one year. So, option **(c)** is correct

**11. The present worth of Rs. 169 due in 2 years at 4% per annum compound interest is**

(a) Rs. 149

(b) Rs. 142

(c) Rs. 156.25

(d) Rs. 163

So, option **(c)** is correct

**12. The amount of Rs. 10000.00 for 2 years at 3% will be**

(a) Rs. 10609

(b) Rs. 10991

(c) Rs. 10812

(d) Rs. 9428

For compound interest : A = P (1 + i)^{n}. Here P = 10000, n = 2, i = 0.03, A = ?

A = 10,000 X (1 + 0.03)^{2} = 10,000 X (1.03)^{2} = 10,000 x 1.0609 = 10609. So, option **(a)** is correct

**13. What will be the compound interest on Rs. 25,000 at 8% per annum for 1 years when the interest is payable half yearly?**

(a) Rs. 2040

(b) Rs. 4160

(c) Rs. 2000

(d) Rs. 3010

P = 25000, n = 2 (because interest is compound half yearly, so the period is 2 half years).

A = P (1 + i)^{n} = 25,000 (1 + 0.04)^{2} = 25,000 (1.04)^{2} = 25,000 x 1.0816 = 27040

So, compound interest = 27040 – 25000 = 2040. So, option **(a)** is correct

**14. What principal will amount to Rs. 2205 in 2 years at 5% per annum compound interest ?**

(a) Rs. 2500

(b) Rs. 2900

(c) Rs. 2000

(d) Rs. 2570

n = 2 i = 0.5 A = 2205 P = ?. A = P (1 + i)^{n} = 2205 = P (1 + 0.05)^{2}. Or, 2205 = P X (1.05)^{2}

Or, P=2205/ (1.05)^{2 }= 2205/ 1.1025 = 2000. So, option **(c)** is correct

**15. On what principal will the compound interest for 3 years at 10% per annum amount to Rs. 993**

(a) Rs. 2800

(b) Rs. 4250

(c) Rs. 6000

(d) Rs. 3000

Compound Interest (CI) = P {(1+i/100)^{n} -1}, where, C.I. = Compound interest, P = Principal, i = Rate of compound interest, N= Number of payment period.

So, 993=P X {1+(10/100)^{3}-1} = P X {1.10)^{3} – 1} = P (1.331 – 1) = P X (0.331).

So, option **(d)** is correct

**16. What will be the difference between the simple and compound interest on Rs. 2000 for 3 years at 10% per annum?**

(a) Rs. 40

(b) Rs. 81

(c) Rs. 91

(d) Rs. 62

= 2000 {(1 + 0.10)^{3} – 1} = 2000 (1.331 – 1) = 2000 x 0.331 = 662

So, Difference between compound interest and simple interest = 662 – 600 = 62.

So, option **(d)** is correct.

**17. If the simple interest on a certain sum for 3 years at 5% per annum be Rs. 1200, what would be compound interest on the same sum for the same time and same rate ?**

(a) Rs. 1100

(b) Rs. 1140

(c) Rs. 1240

(d) Rs. 1261

So, Principal = 8000.

= 8000 (1.1576 – 1) = 8000 x (0.1576) = 1260.80 = 1261 (rounded off).

So, option **(d)** is correct

**18. On what sum will the difference between the simple and compound interest for 2 years at 5% per annum, amount to Rs. 12.50?**

(a) Rs. 4500

(b) Rs. 5000

(c) Rs. 3000

(d) Rs. 4000.

Now difference between CI & SI = CI-SI= .1025P – 0.1P = .025P .

So, .025P = 12.50 0r P=12.5/.025= 5000. So, option **(b)** is correct