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15 Simple Interest / Compound Interest Questions and Answers
15 solved Simple Interest / Compound Interest questions with step-by-step explanations. Includes formulas, shortcuts, and tips for placement tests and competitive exams.
Simple Interest (SI) and Compound Interest (CI) are essential topics for banking, SSC, and placement exams. Simple interest is calculated only on the original principal using the formula SI = (P × R × T) ÷ 100, where P is principal, R is the annual rate, and T is time in years. Compound interest, however, is calculated on the principal plus accumulated interest — the amount grows exponentially as A = P(1 + R/100)^T, and CI = A - P. For two years, there is a useful shortcut: CI - SI = P × (R/100)². The questions below demonstrate both concepts with varied difficulty levels.
Find the Simple Interest on Rs. 3000 at 10% per annum for 3 years.
Find Compound Interest on Rs. 10000 at 20% for 3 years (annual compounding).
Find the Simple Interest on Rs. 3000 at 20% per annum for 3 years.
Find Compound Interest on Rs. 5000 at 20% for 3 years (annual compounding).
Find the Simple Interest on Rs. 10000 at 20% per annum for 3 years.
Find Compound Interest on Rs. 2000 at 20% for 3 years (annual compounding).
For principal Rs. 9000, rate 10% and time 3 years, find (CI - SI).
Find the Simple Interest on Rs. 9000 at 10% per annum for 3 years.
Find Compound Interest on Rs. 7000 at 20% for 2 years (annual compounding).
Find the Simple Interest on Rs. 4000 at 10% per annum for 2 years.
Find Compound Interest on Rs. 8000 at 10% for 3 years (annual compounding).
For principal Rs. 7000, rate 10% and time 3 years, find (CI - SI).
Find Compound Interest on Rs. 4000 at 20% for 2 years (annual compounding).
Find the Simple Interest on Rs. 8000 at 20% per annum for 2 years.
For principal Rs. 5000, rate 10% and time 2 years, find (CI - SI).
Key Takeaways
- SI grows linearly: same interest each year. CI grows exponentially: interest on interest.
- For 2 years: CI - SI = P × (R/100)². This is a time-saving shortcut.
- For half-yearly compounding, halve the rate and double the periods.
Frequently Asked Questions
What is the difference between SI and CI?
Simple Interest (SI) is calculated only on the principal: SI = (P × R × T) ÷ 100. Compound Interest (CI) is calculated on principal + accumulated interest: Amount = P(1 + R/100)^T. Over 2 years, CI exceeds SI by P × (R/100)².
When should I use the compound interest formula?
Use CI when interest is added back to the principal each period. For annual compounding: A = P(1 + R/100)^n. For half-yearly compounding: A = P(1 + R/200)^(2n). The difference from SI grows larger with more compounding periods.
More Simple Interest / Compound Interest Practice Resources
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