Q. A sum of money invested at compound interest becomes $1600 in 2 years and $1764 in 3 years. What is the rate of interest?
A.10%
B.12%
C.15%
D.20%
Solution
The amount increases from $1600 to $1764 in one year, which is an increase of $164. The rate can be calculated as (164/1600) * 100 = 10.25%, which rounds to approximately 12%.
Q. If a sum of money doubles itself in 5 years at simple interest, what will be the rate of interest?
A.10%
B.12%
C.15%
D.20%
Solution
Using the formula for simple interest, we know that the interest earned is equal to the principal. Therefore, if the principal doubles in 5 years, the rate of interest can be calculated as (100 * Interest) / (Principal * Time) = (100 * Principal) / (Principal * 5) = 20%. Thus, the rate of interest is 20%.
Q. If a sum of money doubles itself in 5 years at simple interest, what will be the rate of interest per annum?
A.10%
B.12%
C.15%
D.20%
Solution
Using the formula for simple interest, SI = PRT, where SI = Principal, R = Rate, and T = Time. If the principal doubles in 5 years, then SI = P. Therefore, P = PRT implies R = 1/5 = 20%. Hence, the rate of interest is 10%.
Q. If a sum of money is invested at a simple interest rate of 6% per annum, how much interest will be earned on a principal of $8000 after 4 years? (1920)
Q. If the difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% per annum is $50, what is the principal? (2000)
A.$1000
B.$1200
C.$1500
D.$2000
Solution
The difference between compound interest and simple interest for 2 years is given by SI * (r/100)^2. Setting this equal to $50 and solving gives Principal = $1200.
Q. If the difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% is $50, what is the principal? (2000)
A.$1000
B.$1200
C.$1500
D.$2000
Solution
The difference between CI and SI for 2 years is given by P * (r^2)/100^2. Setting this equal to $50 and solving gives P = $1500.
Q. If the principal amount is $2000 and the total amount after 3 years at a certain rate of simple interest is $2400, what is the rate of interest? (2000)
A.5%
B.6.67%
C.10%
D.12%
Solution
The interest earned is $400. Using SI = PRT, we have 400 = 2000 * R * 3. Solving for R gives R = 6.67%.