Simple Interest and Compound Interest Question Sheet 1

Table Of Content

Practice Question

Answer Key

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Q.1 What would Rs. 6,000 amount to in 18 months at 20% p.a., if the interest is compounded every 6-months? 

a.Rs. 7800

b.Rs. 7928

c.Rs. 7986

d.Rs. 7896

Q.2 A certain sum doubles itself in 8 years under SI. In how many years will the sum become three times itself?

a.8 years

b.12 years

c.16 years

d.20 years

Q.3 At what rate of SI will a sum become five times itself in 20 years?

a.10%

b.15%

c.20%

d.25%

Q.4 A certain sum doubles in 7 years under simple interest. In how many years will the sum become four times itself?

a.14

b.21

c.28

d.None of these 

Q.5 A sum of money triples at compound interest in 7 years. In how many years will it become 27 times itself?

a.12 years

b.21 years

c.27 years

d.343 years

Q.6 What is the interest earned on Rs. 1000 for 2 years at 10% per annum compound interest, compounded annually? (in Rs.)

a.210

b.420

c.315

d.630

Q.7 A sum under CI, interest being compounded annually amounts to Rs.6000 in two years and Rs.8640 in four years. Find the rate of interest.

a.10%

b.12%

c.15%

d.20%

Q.8 If Rs. 20000 amounts to Rs. 24200 in 2 years under compound interest, compounded annually, what is the rate of interest per annum?  

a.10%

b.20%

c.15%

d.cannot be determined 

Q.9 If CI for the third year is Rs. 1210 on a certain sum at the rate of 10% p.a., then what is the CI for fourth year (in Rs.)?

a.Rs. 121

b.Rs. 131

c.Rs. 1310

d.Rs. 1331

Q.10 The compound interest on a certain sum for the third and the fourth years is Rs. 1815 and Rs. 1996.5 respectively. What is the rate of interest?

a.8%

b.10%

c.11%

d.12%

Q.11 The interest on a certain amount under compound interest for the fifth year is Rs. 1280 and that for the sixth year is Rs. 1408. What is the annual rate of interest? 

a.10%

b.15%

c.20%

d.21%

Q.12 In two years an amount gives SI and CI of Rs.600 and Rs.636 respectively. Find the rate of interest.

a.12%

b.10%

c.8%

d.20%

Q.13 SI for two years on a certain sum is Rs.2240 and CI for the 2nd year on the same sum at the same rate of interest compounded annually is Rs.1190. Find the sum.

a.Rs. 17,600

b.Rs. 17,920

c.Rs. 19,040

d.None of these

Q.14 The difference between SI and CI compounded annually on a certain sum for 2 years at 5% per annum is Rs. 20. Find the sum.

a.Rs. 4,000

b.Rs. 5,000

c.Rs. 6,000

d.Rs. 8,000

Q.15 The difference between SI and CI compounded annually on a certain sum for 3 years at 10% per annum is Rs. 620. Find Principal.

a.Rs. 15,000

b.Rs. 20,000

c.Rs. 25,000

d.Rs. 27,500

Q.16 Ram has given Rs. 8000 to Mohan for 3 years and Rs. 12000 to Ravi for 2 years at the same rate of simple interest and got Rs. 3360 as interest. Find the Rate of interest in %.

a.5%

b.6%

c.7%

d.8%

Q.17 Prateek invested Rs. 32,000 for 3 years, interest being compounded annually. If the rate of interest is 10%, 12.5% and 16.66% respectively for 1st, 2nd and 3rd years, then find the total intrest earned by Prateek.

a.Rs. 12,200

b.Rs. 13,000

c.Rs. 13,200

d.Rs. 14,200

Q.18 In how many years will the principal of Rs.1000 will give an interest of Rs.200 on simple interest at an interest rate of 5%?

a.5

b.4

c.6

d.4.5

Q.19 The ratio of Principal and Amount after one year on simple interest is 5 : 10, then the rate of interest per annum is?

a.50%

b.75%

c.100%

d.70%

Q.20 The ratio of the principal and the final amount is 5 : 9 on simple interest in 4 years. What is the rate of interest?

a.20%

b.24%

c.25%

d.30%

Q.21 A sum of money is doubled in 8 years with simple interest. How many years more a person needs to wait to get it tripled?

a.6 years

b.8 years

c.4 years

d.9 years

Q.22 Difference between CI and SI after three years at the rate of 16.66% p.a. is Rs.7600. Find the principal amount (in Rs.).

a.86000

b.86200

c.86400

d.90000

Q.23 Find the CI on Rs.120000 for one year at 40% per annum compounded quarterly.

a.Rs. 55692

b.Rs. 48000

c.Rs. 53147

d.None of these

Q.24 The CI on Rs.8000 for 3 years at 15% for first year, 10% for second year, 5% for the third year will be?

a.Rs.2626

b.Rs.2343

c.Rs.2723

d.Rs.2134

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Frequently Asked Questions — Simple & Compound Interest (Installments) for CAT 2026

What is the difference between Simple Interest and Compound Interest?

Simple Interest (SI) is calculated on the original principal: SI = PRT/100. Compound Interest (CI) adds interest to the principal each period: CI = P(1+r/100)^n - P. CI is always greater than or equal to SI for the same principal and rate.

How are installment-based SI/CI questions structured in CAT?

Installment questions ask you to find equal installments that repay a loan with interest. For SI-based installments: use the formula for total payment over n years. For CI-based installments: use the present value concept where each installment's present value sums to the loan amount.

What is the formula for equal annual installments under Compound Interest?

If loan = P, rate = r%, and n = number of installments, then each installment X satisfies: P = X/(1+r/100) + X/(1+r/100)^2 + ... + X/(1+r/100)^n. Solving gives: X = P × r/100 / (1 - (1+r/100)^-n).

How many SI/CI questions appear in CAT each year?

CAT typically has 1–2 questions from SI/CI, often focusing on installment calculations, effective rate of interest, or comparing SI and CI. The topic overlaps with percentage and ratio questions.

What shortcuts exist for CI calculations in exam conditions?

For 2 years: CI = P[(1+r/100)^2 - 1]. The extra amount CI earns over SI for 2 years = P(r/100)^2. For 10% rate over 2 years: CI = P × 0.21, SI = P × 0.20, difference = P × 0.01.

What is the rule of 72 and is it useful for CAT?

The Rule of 72 says money doubles in approximately 72/r years at r% CI. For example, at 8% CI, money doubles in ~9 years. While not directly tested in CAT, it helps quickly estimate time-value scenarios in DI sets.

How do I solve installment problems without a calculator?

Use the Present Value method: each installment X discounted back to today must sum to the loan. For 2 installments at r%: Loan = X/(1+r/100) + X/(1+r/100)^2. Solve for X. Practice with common rates (10%, 20%, 25%) to build speed.

Is Simple and Compound Interest tested in IPMAT and CMAT?

Yes. Both IPMAT and CMAT test SI/CI regularly. IPMAT questions tend to be more conceptual (installments, effective rate), while CMAT questions are more formula-application based. Preparing for CAT-level SI/CI questions covers both exams well.