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Welcome to ICOME Quiz Corner

Q1. A sum of money placed at C.I double itself in 6 years. It will amount to eigth times itself at the same rate of interest in _____ years .

(a) 18

(b) 20

(c) 17

(d) 15

Solution.a
In this case we can apply formula

(n1)1/t1 = (n2)1/t2 ⇒ (2)1/6 = (8)1/t2

(2)1/6 = (2)3/t2 ⇒
1/6
=
3/t2
⇒ t2 = 18
Solution

Q2. A sum of Rs 5000 deposited at CI in an financial institution becomes double after 3 years , In a years the whole amount will be _____________ .

(a) 300000

(b) 40000

(c) 35000

(d) 50000

Solution. b
(x1)1/t1 = (x2)1/t2

(2)1/3 = (x2)1/9 ⇒ x2 = (2)9/3 = 23 = 8

So Amount is = 8 x 5000 = 40000 .
Solution

Q3. What is the difference between the compound interests on Rs. 5000 for 1
1/2
years at 4% per annum compounded yearly and half-yearly?

(a) Rs.2.04

(b) Rs.4.56

(c) Rs.4.80

(d) Rs.7.30

Solution.a
Interest in the case of compounded annually

CI = P{(1 +
r/100
)n - 1}

= 5000 {(1 +
r/100
) (1 +
r/200
) - 1}

= 5000 {(1 +
4/100
) (1 +
2/100
) - 1}

= 304

Interest in the case compounded half-yearly

In the case of compounded half-yearly number of years multiplied by 2 and rate of interest divided by 2

CI = P{(1 +
r/100
)2n - 1}

= 5000 {(1 +
4/100
) 3 - 1}

= 5000 {(1.02)3 - 1} = 306.04

So difference between interest is = 306.04 - 304

= 2.04
Solution

Q4. The rates of simple interest in two banks A and B are in the ratio 5:4. A person wants to deposit his total savings in two banks in such a way that he received equal half-yearly interest from both . He should deposit the savings in banks A and B in the ratio.

(a) 3:5

(b) 4:5

(c) 5:5

(d) 6:2

Solution. b
As per question SIA = SIB

Money A invested in Bank A and money B invested in bank B .

A x (5x) x 1/200
=
B x (4x) x 1/200


A . 5 = B.4

A/B
=
4/5
⇒ A:B = 4:5
Solution

Q5. The compound interest on a certain sum for two years is Rs 41 and the simple interest is Rs 40. Find the rate of interest per annum .

(a) 4%

(b) 5%

(c) 3%

(d) 9%

Solution.b
Rate =
2 x Difference in CI and SI /SI
x 100

Rate =
2 x 1 /40
x 100

= 5%
Solution