**Compound Interest Asked Questions in RRB NTPC**

Download RRB NTPC Top-10 Compound Interest Questions PDF. Questions based on asked questions in previous exam papers very important for the Railway NTPC exam.

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**Question 1: **What is the sum which earns Rs. 420 as compound interest in second year at the annual interest rate of 5% ?

a) Rs. 4,000

b) Rs. 42,000

c) Rs. 8,000

d) Rs. 21,000

**Question 2: **On what sum of money will the compound interest for 3 years at 5% per annum amount to Rs. 630.50 ?

a) Rs. 1200

b) Rs. 1261

c) Rs. 4000

d) Rs. 3000

**Question 3: **A certain amount which was loaned on simple interest doubled in 10 years Then the amount received is loaned on compound interest for another 2 years on the same rate What is the total rise in the amount after 12 years with the initial principal amount ?

a) 42%

b) 142%

c) 242%

d) 150%

**Question 4: **At what rate of compound interest a sum will be $\frac{25}{16}$ times of itself in 2 years?

a) 16%

b) 18%

c) 20%

d) 25%

**Question 5: **If the interest is compounded annually and the compound interest after 3 years at 10% per annum on a sum is Rs. 331, the principal is

a) Rs. 900

b) Rs. 1000

c) Rs. 1050

d) Rs. 1100

**Question 6: **What will be the ratio of amount and the principal in n years at 5% p.a. rate of compound interest ?

a) $(22)^{n} : (21)^{n}$

b) $(20)^{n} : (21)^{n}$

c) $(21)^{n} : (20)^{n}$

d) None of these

**Question 7: **A sum of money put out at compound interest amounts to Rs. 16900 in 2 years and to Rs. 17576 in 3 years. Find the rate of interest per annum.

a) 4%

b) 5%

c) 10%

d) 6%

**Question 8: **What is the compound interest on Rs. 48,000 for 2 years at 20 % p.a., if interest is compounded annually?

a) Rs. 69,120

b) Rs. 21,120

c) Rs. 76,800

d) Rs. 72,000

**Question 9: **The simple interest on a certain sum of money invested at a certain rate for 2 years amounts to Rs. 1200 The compound interest on the same sum of money invested at the same rate of interest for 2 years amounts to Rs. 1290. What was the principal?

a) Rs. 12000

b) Rs. 16000

c) Rs. 6000

d) Rs. 4000

**Question 10: **A sum of Rs. 2000 at 40% per annum compounded annually. Calculate the interest for the third year at compound interest.

a) 1500

b) 1600

c) 1568

d) 1750

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**Answers & Solutions:**

**1) Answer (C)**

x * 1.05 * 1.05 – x * 1.05 = 420

implies x = 8000 Rs.

**2) Answer (C)**

$ P (1 + .05) ^ {3}$ – P= 630.5

Solving for P, we get P = 4000

**3) Answer (B)**

The amount doubled in 10 years. So, the interest = principle.

So, rt/100 = 1

r = 10% pa

Now compound interest = ?

2P $(1 + .1) ^ {2}$ = 2P x 1.21 = 2.42P

Total rise is P to 2.42P = rise of 142%

**4) Answer (D)**

P * $ (1 + \frac{r}{100})^{2} = P * \frac{25}{16} $

Implies $ (1 + \frac{r}{100})^{2} = \frac{25}{16} $

$ 1 + \frac{r}{100}= \frac{5}{4} $

r = 25%

**5) Answer (B)**

$ P \times (1 + \frac{10}{100}) ^{3} $= P + 331

1.331P = P + 331

So, P = 1000

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**6) Answer (C)**

amount of compound interest=A=P(1 + r/100)$^{t}$ where P=Principal,r=rate of interest and t=time

∴ A/P=(1 + .05)$^{n}$

=(21/20)$^{n}$

**7) Answer (A)**

Let x be the principal amount and r be the compound interest.

The amount after first year =$x + xr$

the amount after second year=$(x + xr) +(xr + xr^{2})=x+2xr + xr^{2}=x(1+r)^{2} $=16900 -(1)

Similarly, the amount after third year =$x(1 + r)^{3}$= 17576 -(2)

dividing 2 by 1 we get,

1+r=1.04

r=.04

Thus the interest is 4%.

**8) Answer (B)**

Amount = $ P(1 + \frac{r}{100})^n$

where

P = Principal

r = rate of interest

n = number of years

Amount after two years = $ 48000(1 + \frac{20}{100})^2$ = 69120

Compound Interest = 69120 – 48000 = 21,120

So , the answer would be option b)Rs. 21,120

**9) Answer (D)**

Let principal be P and rate of interest be r.

Simple interest for 2 years = 1200

Simple interest for 1 year = 600

Difference in compound interest and simple interest = 90 , which is interest earned on the interest of first year.

$\frac{600 \times r}{100} = 90 $ => r= 15

$\frac{P \times 15}{100} = 600$ =>P = 4000

So, the answer would be option d)Rs. 4000

**10) Answer (C)**

When a sum of amount is compounded anually, then there after each interest which is gained on the amount is added with the principal amount and then the next yera’s principal is generated, and then on the second year the interest is calculated on the basis of the new principal.

Explanation:

so in order to calculate the interest of the amount Rs 2000/- on third year we will do the following:-

interest 1st year = $\frac{2000\times40 }{ 100} = 800$

new principal = 2800

interest on 2nd year =$\frac{ 2800 \times40 /}{100 }= 1120$

new principal = 3920

interest on 3rd year = $\frac{3420 \times 40 }{ 100} = 1568$

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We hope this Top-10 Compound Interest Questions pdf for RRB NTPC exam will be highly useful for your Preparation.