## Business Mathematics MCQ on Simple and Compound interest

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1. The money borrowed or lent for a certain period is:

(a) Amount

(b) Principal

(c) Interest

(d) Loan

**Answer (b) Principal**

2. The extra amount paid by the borrower to the lender is:

(a) Amount

(b) Principal

(c) Interest

(d) Loan

**Answer (c) Interest**

3. The interest calculated at a fixed rate on the original amount of principal borrowed is:

(a) Amount

(b) Principal

(c) Simple Interest

(d) Compound Interest

**Answer (c) Simple Interest**

4. The interest calculated on accumulated sum of the principal.

(a)Compound Interest

(b) Principal

(c) Simple Interest

(d) Amount

**Answer (a)Compound Interest**

5. The difference between the amount and the principal is:

(a) Amount

(b) Principal

(c) Interest

(d) Time

**Answer (c) Interest**

6. The simple interest on sum for one year is 60. What will be the compound on the same sum and at the same rate of interest for one year ?

(a) 66

(b) 60

(c) 70

(d) 76

**Answer (b) 60**

7. The time in which a sum of 10,000 fetches an interest of ₹ 3,500 at 5% is:

(a) 6 year

(b) 7 years

(c) 8 years

(d) 10 years

**Answer (b) 7 years**

8. The gradual decrease in the value of assets is:

(a) Appreciation

(b) Amortization

(c) Depreciation

(d) Depletion

**Answer (c) Depreciation**

9. What sum will amount to Rs.1000 in 2 years @5% p.a. compounded half yearly?

(a) 509.50

(b) 809.50

(c) 409.10

(d) 905.80

**Answer (d) 905.80**

10. The number of years in which a sum doubles itself at 4% p.a. compound is:

(a) 10 years

(b) 15 years

(c) 20 years

(d) 18 years

**Answer (d) 18 years**

11. In how many years the Simple interest on 600 at 10% rate will become 300?

(a) 5

(b) 3

(c) 2

(d) 6

**Answer (a) 5**

12. Rs.300 is lent on 8% simple interest. What amount will be repaid after 2.5 years?

(a) 400

(b) 500

(c) 350

(d) 360

**Answer (d) 360**

13. What is the rate of interest per annum if a sum fetches its one-fourth on simple interest at the end of five years?

(a) 5%

(b) 2.5%

(c) 4%

(d) None.

**Answer (a) 5%**

14. A sum of money doubles itself in 8 years at simple interest. What will be the rate of interest p.a.?

(a) 11.5

(b) 12

(c) 12.5

(d) 11.3

**Answer (c) 12.5**

15. How long it will take to increase the value of the sum by 40%, if the sum is invested at 5% p.a. simple interest?

(a) 5 years

(b) 6 years

(c) 7 years

(d) 8 years

**Answer (d) 8 years**

16. What will be the interest on 1,500 invested for 2 year at 5% compoun ?

(a) 158.25

(b) 153.25

(c) 143.25

(d) 140.25

**Answer (b) 153.25**

17. A man borrowed 3,125 and at the end of 2 years he repaid 4,500. What is rate of interest charged by the lender if it is compounded annually?

(a) 30%

(b) 25%

(c) 20%

(d) 15%

**Answer (c) 20%**

18. If the total interest earned after 2 years at the rate of 12% p.a. compounded annually is 254.40, then the principal amount is

(a) 1,200

(b) 1,100

(c) 1,000

(d) 900

**Answer (c) 1,000**

19. If the difference between C.I. and S.I. is 1,440 when the rate of interest is 12% per annum for a period of 2 years, what is the amount of investment?

(a) 1.5 lakh

(b) 1 lakh

(c) 2.5 lakh

(d) 1.2 lakh

**Answer (b) 1 lakh**

20. What would be the S.I. if the C.I. is 2,100 invested on a certain sum for 2 years at 10% per annum.

(a) 10,000

(b) 20,000

(c) 12,000

(d) 18,000

**Answer (b) 20,000**

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