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30 Simple Interest / Compound Interest Questions and Answers

30 solved Simple Interest / Compound Interest questions with step-by-step explanations. Includes formulas, shortcuts, and tips for placement tests and competitive exams.

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Advanced simple interest / compound interest questions for experienced learners. These medium-to-hard questions test deeper understanding and are ideal for those who have already mastered the basics. Each question includes a detailed explanation.

Key Formulas

SI = (P × R × T) / 100 Amount = P + SI CI: Amount = P × (1 + R/100)^T CI = Amount - P Difference CI - SI for 2 years = P × (R/100)² Half-yearly compounding: Use R/200 and 2T periods
Q1 Medium

Find Compound Interest on Rs. 9000 at 10% for 3 years (annual compounding).

  • A. 2979 ✓
  • B. 2859
  • C. 2919
  • D. 3039
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 11979. CI = Amount - Principal = 2979.
Q2 Medium

Find the Simple Interest on Rs. 6000 at 10% per annum for 2 years.

  • A. 1120
  • B. 1160
  • C. 1240
  • D. 1200 ✓
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 6000 x 10 x 2/100 = 1200.
Q3 Medium

For principal Rs. 7000, rate 10% and time 2 years, find (CI - SI).

  • A. 150
  • B. 70 ✓
  • C. 110
  • D. 30
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1400, CI = 1470. Difference = 1470 - 1400 = 70.
Q4 Medium

Find Compound Interest on Rs. 10000 at 10% for 2 years (annual compounding).

  • A. 2160
  • B. 2040
  • C. 1980
  • D. 2100 ✓
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 12100. CI = Amount - Principal = 2100.
Q5 Medium

Find the Simple Interest on Rs. 8000 at 20% per annum for 2 years.

  • A. 3160
  • B. 3200 ✓
  • C. 3240
  • D. 3120
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 8000 x 20 x 2/100 = 3200.
Q6 Medium

For principal Rs. 6000, rate 10% and time 3 years, find (CI - SI).

  • A. 186 ✓
  • B. 146
  • C. 226
  • D. 106
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1800, CI = 1986. Difference = 1986 - 1800 = 186.
Q7 Medium

Find the Simple Interest on Rs. 5000 at 10% per annum for 3 years.

  • A. 1540
  • B. 1460
  • C. 1500 ✓
  • D. 1420
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 5000 x 10 x 3/100 = 1500.
Q8 Medium

Find Compound Interest on Rs. 5000 at 10% for 2 years (annual compounding).

  • A. 1050 ✓
  • B. 990
  • C. 1110
  • D. 930
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 6050. CI = Amount - Principal = 1050.
Q9 Medium

Find the Simple Interest on Rs. 7000 at 20% per annum for 2 years.

  • A. 2760
  • B. 2720
  • C. 2840
  • D. 2800 ✓
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 7000 x 20 x 2/100 = 2800.
Q10 Medium

For principal Rs. 7000, rate 20% and time 3 years, find (CI - SI).

  • A. 856
  • B. 896 ✓
  • C. 816
  • D. 936
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 4200, CI = 5096. Difference = 5096 - 4200 = 896.
Q11 Medium

Find the Simple Interest on Rs. 9000 at 20% per annum for 2 years.

  • A. 3600 ✓
  • B. 3520
  • C. 3640
  • D. 3560
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 9000 x 20 x 2/100 = 3600.
Q12 Medium

For principal Rs. 6000, rate 20% and time 3 years, find (CI - SI).

  • A. 728
  • B. 688
  • C. 768 ✓
  • D. 808
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 3600, CI = 4368. Difference = 4368 - 3600 = 768.
Q13 Medium

Find the Simple Interest on Rs. 10000 at 20% per annum for 3 years.

  • A. 5960
  • B. 5920
  • C. 6000 ✓
  • D. 6040
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 10000 x 20 x 3/100 = 6000.
Q14 Medium

For principal Rs. 5000, rate 10% and time 3 years, find (CI - SI).

  • A. 195
  • B. 155 ✓
  • C. 115
  • D. 75
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1500, CI = 1655. Difference = 1655 - 1500 = 155.
Q15 Medium

Find the Simple Interest on Rs. 5000 at 20% per annum for 3 years.

  • A. 3040
  • B. 2960
  • C. 3000 ✓
  • D. 2920
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 5000 x 20 x 3/100 = 3000.
Q16 Medium

For principal Rs. 10000, rate 10% and time 3 years, find (CI - SI).

  • A. 310 ✓
  • B. 230
  • C. 350
  • D. 270
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 3000, CI = 3310. Difference = 3310 - 3000 = 310.
Q17 Medium

Find the Simple Interest on Rs. 2000 at 10% per annum for 3 years.

  • A. 600 ✓
  • B. 560
  • C. 520
  • D. 640
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 2000 x 10 x 3/100 = 600.
Q18 Medium

For principal Rs. 6000, rate 10% and time 2 years, find (CI - SI).

  • A. 20
  • B. 60 ✓
  • C. 140
  • D. 100
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1200, CI = 1260. Difference = 1260 - 1200 = 60.
Q19 Medium

Find Compound Interest on Rs. 8000 at 10% for 3 years (annual compounding).

  • A. 2648 ✓
  • B. 2588
  • C. 2708
  • D. 2528
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 10648. CI = Amount - Principal = 2648.
Q20 Medium

For principal Rs. 3000, rate 20% and time 2 years, find (CI - SI).

  • A. 120 ✓
  • B. 80
  • C. 40
  • D. 160
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1200, CI = 1320. Difference = 1320 - 1200 = 120.
Q21 Medium

Find the Simple Interest on Rs. 10000 at 10% per annum for 2 years.

  • A. 1960
  • B. 1920
  • C. 2040
  • D. 2000 ✓
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = PRT/100 = 10000 x 10 x 2/100 = 2000.
Q22 Medium

For principal Rs. 6000, rate 20% and time 2 years, find (CI - SI).

  • A. 280
  • B. 160
  • C. 240 ✓
  • D. 200
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 2400, CI = 2640. Difference = 2640 - 2400 = 240.
Q23 Medium

Find Compound Interest on Rs. 2000 at 10% for 3 years (annual compounding).

  • A. 662 ✓
  • B. 602
  • C. 722
  • D. 542
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 2662. CI = Amount - Principal = 662.
Q24 Medium

For principal Rs. 8000, rate 10% and time 2 years, find (CI - SI).

  • A. 120
  • B. 80 ✓
  • C. 40
  • D. 0
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 1600, CI = 1680. Difference = 1680 - 1600 = 80.
Q25 Medium

Find Compound Interest on Rs. 6000 at 10% for 2 years (annual compounding).

  • A. 1140
  • B. 1320
  • C. 1260 ✓
  • D. 1200
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 7260. CI = Amount - Principal = 1260.
Q26 Medium

For principal Rs. 5000, rate 20% and time 3 years, find (CI - SI).

  • A. 560
  • B. 600
  • C. 640 ✓
  • D. 680
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 3000, CI = 3640. Difference = 3640 - 3000 = 640.
Q27 Medium

Find Compound Interest on Rs. 4000 at 20% for 3 years (annual compounding).

  • A. 2792
  • B. 2912 ✓
  • C. 2972
  • D. 2852
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 6912. CI = Amount - Principal = 2912.
Q28 Medium

For principal Rs. 7000, rate 10% and time 3 years, find (CI - SI).

  • A. 217 ✓
  • B. 177
  • C. 137
  • D. 257
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 2100, CI = 2317. Difference = 2317 - 2100 = 217.
Q29 Medium

Find Compound Interest on Rs. 7000 at 20% for 3 years (annual compounding).

  • A. 5156
  • B. 5036
  • C. 5096 ✓
  • D. 4976
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. Amount = P(1+r/100)^n = 12096. CI = Amount - Principal = 5096.
Q30 Medium

For principal Rs. 10000, rate 20% and time 2 years, find (CI - SI).

  • A. 400 ✓
  • B. 360
  • C. 440
  • D. 320
Explanation: For Simple Interest: SI = (Principal × Rate × Time) ÷ 100. For Compound Interest: Amount = P × (1 + R/100)^T. The key difference is that CI earns interest on interest. SI = 4000, CI = 4400. Difference = 4400 - 4000 = 400.

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.

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