Arithmatical - Compound Interest
DIRECTIONS : Problems based on Interest.
16. |
In what time will Rs.1000 become Rs.1331 at 10% per annum compounded annually? |
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A. 2 years |
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B. 3 years |
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C. 4 years |
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D. 7 years |
Solution |
Principal | = Rs.1000; |
Amount | = Rs.1331; |
Rate | = Rs.10%p.a. |
Let the time be n years.Then |
[1000(1+10/100)Λn;] |
= 1331. |
= (1331/1000) |
= (11/10)³ |
Therefore n = 3 years. |
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17. |
The effective annual rate of interest corresponding to a nominal rate of 6% per annum payable half yearly is |
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A. 6.06% |
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B. 6.07% |
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C. 6.08% |
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D. 6.09% |
Solution |
Amount of Rs.100 for 1 year when compounded half yearly |
= Rs.[100 x (1+3/100)2] |
= Rs. 106.09%. |
Effective rate | = (106.09 - 100)% |
= Rs. 6.09%. |
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18. |
What will be the difference between simple interest and compound interest @10% per annum on a sum of Rs. 1000 after 4 years? |
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A. Rs. 31 |
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B. Rs. 32.10 |
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C. Rs. 40.40 |
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D. Rs. 64.10 |
Solution |
S.I. | =Rs(1000x10x4 / 100) |
= Rs.400. |
C.I. | =Rs.[1000x(1x10/100)4-1000] |
= Rs. 464.10 |
∴ Difference = Rs.(464.10 - 400) |
= Rs. 64.10 |
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