Simple Interest & Compound Interest Practice Sheet
(with Solutions)
Q1. ₹5000 is invested at 5% per annum simple interest for 3 years. What is the total amount after 3
years?
A) ₹5500 B) ₹5750 C) ₹6000 D) ₹5250
Solution: Simple Interest = (P × R × T) / 100 = (5000 × 5 × 3) / 100 = ₹750. Amount = P + SI =
5000 + 750 = ₹5750. Answer: B) ₹5750
Q2. Simple interest is ₹1200, rate is 8% per annum and time is 2 years. What was the principal?
A) ₹6000 B) ₹7500 C) ₹9000 D) ₹10000
Solution: P = (SI × 100) / (R × T) = (1200 × 100) / (8 × 2) = ₹7500. Answer: B) ₹7500
Q3. ₹2000 is lent at 5% per annum simple interest and total SI received is ₹300. For how many
years was the money lent?
A) 2 years B) 3 years C) 4 years D) 1.5 years
Solution: T = (SI × 100) / (P × R) = (300 × 100) / (2000 × 5) = 3 years. Answer: B) 3 years
Q4. ₹8000 is invested at 10% per annum compounded annually for 2 years. What is the compound
interest?
A) ₹1600 B) ₹1680 C) ₹1720 D) ₹1500
Solution: Amount = P(1 + R/100)^T = 8000(1.10)^2 = 8000 × 1.21 = ₹9680. CI = 9680 − 8000
= ₹1680. Answer: B) ₹1680
Q5. ₹10000 is invested at 12% per annum compounded half-yearly for 1 year. What is the amount
after 1 year?
A) ₹11120 B) ₹11236 C) ₹11300 D) ₹11000
Solution: Half-yearly rate = 12% / 2 = 6%. Periods = 2. Amount = 10000(1 + 0.06)^2 = 10000 ×
1.1236 = ₹11236. Answer: B) ₹11236
Q6. ₹5000 is invested at 8% per annum compounded quarterly for 2 years. What is the amount
(rounded to two decimals)?
A) ₹5800.00 B) ₹5858.30 C) ₹5900.50 D) ₹5750.00
Solution: Quarterly rate = 8% / 4 = 2% = 0.02. Periods = 2 × 4 = 8. Amount = 5000(1.02)^8 ≈
5000 × 1.171659381 = ₹5858.30 (approx). Answer: B) ₹5858.30
Q7. On ₹15000 at 7.5% per annum for 3 years: find the difference between compound interest and
simple interest (CI − SI).
A) ₹200.25 B) ₹259.45 C) ₹300.00 D) ₹150.75
Solution: SI = (15000 × 7.5 × 3) / 100 = ₹3375. Amount (CI) = 15000(1.075)^3 = 15000 ×
1.242296875 = ₹18634.45. CI = 18634.45 − 15000 = ₹3634.45. Difference = 3634.45 − 3375 =
₹259.45 (approx). Answer: B) ₹259.45
Q8. ₹12000 is invested at 6% per annum compounded monthly for 2 years. What is the compound
interest (rounded to two decimals)?
A) ₹1500.00 B) ₹1525.92 C) ₹1550.75 D) ₹1600.00
Solution: Monthly rate = 6% / 12 = 0.5% = 0.005. Periods = 24. Amount = 12000(1.005)^24 ≈
12000 × 1.127159776 = ₹13525.92. CI = 13525.92 − 12000 = ₹1525.92. Answer: B) ₹1525.92
Q9. How many years will it take for an amount to double at 10% per annum compounded annually?
(round to two decimals)
A) 6.5 years B) 7 years C) 7.27 years D) 8 years
Solution: (1.10)^t = 2 ⇒ t = ln(2) / ln(1.10) ≈ 0.693147 / 0.095310 = 7.27 years (approx).
Answer: C) 7.27 years
Q10. ₹8000 is invested at 6% per annum simple interest for 2 years, and ₹12000 is invested at 5%
per annum compounded annually for 2 years. What is the total interest received from both
investments?
A) ₹2100 B) ₹2190 C) ₹2000 D) ₹2300
Solution: SI on ₹8000 = (8000 × 6 × 2) / 100 = ₹960. CI on ₹12000 = 12000(1.05)^2 − 12000 =
13230 − 12000 = ₹1230. Total interest = 960 + 1230 = ₹2190. Answer: B) ₹2190