Q1. Saina invested in mutual funds.
If that mutual fund offered an interest rate of 5% per
annum compounded annually, then find the amount invested by Saina given that she got a
total amount 77175 from the funds after years.
Solution: We use CI formula: A = P(1 + r/100)^t. Given A=77175, r=5%. Without time (t), P cannot
be exactly calculated. Likely missing data.
Q2. A sum is taken for 1 year at 16 % per annum. If the interest is charged after every three
months, then the rate will be.
Solution: Effective annual rate = (1 + 16%/4)^4 - 1 = (1 + 0.04)^4 - 1 = 0.1699 = 16.99%.
Q3. Jaydeev borrows Rs 16,00,000 from a bank for house construction at 12% per annum.
Find the amount he has to pay after 1 year if the interest calculated half-yearly.
Solution: CI formula: A = P(1 + r/n)^(n*t). P=1600000, r=0.12, n=2, t=1. A = 1600000(1+0.06)^2 =
1600000 × 1.1236 = Rs. 17,97,760.
Q4. 'A' and 'B' provide loan for 2 years at 7% per annum. A lends at simple interest and B at
compound interest. Who earns more interest?
Solution: Simple Interest: SI = P×r×t/100 = P×7×2/100 = 0.14P. Compound Interest: CI =
P((1+0.07)^2 -1)= P(1.1449-1)=0.1449P. Hence B earns more.
Q5. The population of a village 3 years ago was 625. It decreased every year at the rate of 4%
per annum. Find its present population.
Solution: Population after 3 years: P = 625 × (1 - 0.04)^3 = 625 × (0.96)^3 = 625 × 0.8847 = 553
approx.
Q6. On what sum will be compound interest at 7.21 % per annum for 3 years compounded
annually is Rs. 3101.40?
Solution: CI formula: CI = P((1 + r/100)^t - 1). Given CI=3101.40, r=7.21%, t=3. Solve for P: P =
3101.40 / ((1.0721^3 - 1)) = 3101.40 / 0.232 ≈ Rs. 13364.
Q7. At what rate percent per annum will Rs. 32000 yield a compound interest of Rs. 5044 in 9
months interest being compounded quarterly?
Solution: Quarterly compounding: A = P(1 + r/400)^(n). Here P=32000, CI=5044 → A=37044.
Time=9 months=3 quarters. Solve 37044=32000(1+r/400)^3 ⇒ (1+r/400)^3=1.1576 ⇒
r/400=(1.1576^(1/3)-1)=0.0499 ⇒ r=19.96%.
Q8. The simple interest on a certain sum of money for 3 years at 8% per annum is half of the
compound interest on Rs.4000 for 2 years at 10% per annum. What is sum placed on simple
interest?
Solution: CI on 4000 at 10% for 2 yrs = 4000[(1.1)^2 -1]=4000(1.21-1)=4000×0.21=840. Half=420.
SI=420=P×(8×3/100)=0.24P ⇒ P=420/0.24=1750.
Q9. Ashish opened a book shop with an initial investment of Rs.32000. In the first year, he
incurred a loss of 5%. However, during the second year he earned a profit of 10% which in
the third year rise to 12.31 %. Calculate his net profit for the entire period of 3 years.
Solution: Year 1: 32000×0.95=30400. Year 2: 30400×1.10=33440. Year 3: 33440×1.1231=37568.
Net profit=37568-32000=Rs. 5568.
Q10. Uranium-233 decays at a constant rate in such ways that it reduces to 50% in 160000
years. In how many years will it reduce to 25%?
Solution: Half-life concept: 50% in 160000 yrs, so 25% = 2 half-lives = 320000 years.
Q11. In what time will a sum of Rs 3,750 at 20% per annum compounded annually amount to
Rs 6,480?
Solution: CI formula: 6480 = 3750(1+0.20)^t ⇒ (6480/3750)=(1.2)^t ⇒ 1.728=(1.2)^t.
t=log(1.728)/log(1.2)=2.67 yrs.
Q12. An amount of Rs 'X' at compound interest at 20% per annum for 3 years becomes 'Y'.
What is Y : X?
Solution: Y/X = (1+0.20)^3 = 1.728. Ratio = 1.728:1.
Q13. If an amount of 80000 is invested for years such that the compound interest received
for the first and the second year is 9% and 11% per annum respectively, then the value of
interest received is.
Solution: Year 1: Interest=80000×0.09=7200. Year 2: Amount=87200. Interest=87200×0.11=9592.
Total interest=16792.
Q14. Population of a town increases by 1% every year. If current population of the town is
80000. Find the population of town after 2 years.
Solution: Population after 2 years=80000×(1.01)^2=80000×1.0201=81608 approx.
