CAT QA Preparation 2022: Check Compound Interest & Simple Interest Questions and Solutions

CAT Compound Interest and Simple Interest topics are essential not only for the quantitative section but also for CAT DILR section as question sets on interest-based information can be asked. Questions on CI/ SI are easy and at times can be solved by just reading the questions if you know all the important terms and short tricks.

Candidates are generally tested on their speed, time, and accuracy in CAT Quantitative Aptitude section. Based on the analysis of the past few years, it can be noticed that Compound and Simple Interest questions are not always asked in CAT exam. However, it is always better to prepare for CI/ SI topic as it is a part of CAT Syllabus and questions can be asked in CAT 2022.

Given below is a set of 25 questions for Quantitative Ability based on Simple Interest and Compound Interest. Questions have been set based on the pattern of the exam and its difficulty level to help CAT aspirants who will appear for the exam in 2022.

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CAT Compound Interest & Simple Interest (CI/ SI) Quiz

1. A father left a will of Rs.35 lakhs for his two daughters aged 8.5 and 16 when he died such that they get equal amounts when each of them reaches the age of 21 years. The original amount of Rs.35 lakhs as instructed has been invested at 10% p.a. simple interest. How much did the elder sister get at the time of the will?

21 lakh
20 lakh
17 lakh
23 lakh

2. In three years what will Rs.1500 amount to if it is invested in 20% p.a. compound interest, interest being compounded annually?

2400
2592
2678
2544

3. If a sum of money grows to 144/121 times when invested for two years in a scheme ( interest is compounded annually). How long will the same sum of money take to treble if invested at the same rate of interest in a scheme( interest is computed using simple interest method).

11 years
22 years
18 years
30 years

4.Three years back the population of a town was 3600. Currently it is 4800. What will be the population after three years, assuming the rate of growth of the population has been constant over the years and has been compounding annually?

6400
6345
7200
6500

5. When compounded annually, Rs.100 doubled in 5 years. How long will it take to get another Rs.200 compound interest?

10 years
7.5 years
5 years
8 years

6.The difference between the simple interest and the compound interest on a certain sum at 12% p.a. is Rs.90 for two years. After 3 years what will be the value of the amount?

9000
8781.80
8530.80
8780.80

7.Vijay invested Rs. 50,000 at an interest rate of 10% and 15% in two different firms. At the end of the year, he got an amount of Rs. 7000. How much did he invest initially at a 10% interest rate?

Rs. 40,000
Rs. 11,000
Rs. 10,000
Rs. 20,000

8.A sum of money invested at 8% p.a. simple interest for a certain number of years grows to Rs.180. The same sum of money invested at 4% p.a. simple interest for the same number of years grows to Rs.120 only. The sum was invested for how many years?

25 years
26 years
33 years and 4 months
Cannot be determined

9.How long will it take for a sum of money to grow invested at 12.5% p.a simple interest, from Rs.1250 to Rs.10,000?

8 years
54 years
56 years
72 years

10.An amount of Rs 5887 is divided between Shyam and Ram, such that Shyam's share at the end of 9 years is equal to Ram's share at the end of 11 years, compounded annually at the rate of 5%. Find the share of Shyam.

3087
3087.20
2088
None of these

11.A person invests some amount in a bank, at the beginning of 2004. The accumulated interest is Rs.10,000, in the beginning of 2007. The accumulated interest becomes Rs.25,000, at the beginning of 2010. If the interest rate is compounded annually and the annual interest rate is fixed, the principal amount is :

Rs. 20,000
Rs. 16,000
Rs. 18,000
None of the above

12.Krishna borrows Rs. 45K from a bank at 10% compound interest. He repays it in three annual installments that are in arithmetic progression and ends up paying 54K totally. How much did he pay in year 1?

Rs. 16,500
Rs. 19,500
Rs. 21,000
Rs. 18,000

13.On a certain sum of money, compound interest earned at the end of three years is equal to Rs. 1456. If the compound interest at the end of two years is Rs. 880, compute the principal invested.

Rs. 2,400
Rs. 2,800
Rs. 2,000
Rs. 1,600

14. Ram deposits Rs. Q with a bank at r% compound interest and sees it reach Rs.16Q in 20 years. If he had invested the same amount at r% simple interest for 20 years, what will be the amount?

Between Rs. 2Q and 2.5Q
Between Rs. 2.5Q and 3Q
Between 3Q and 3.5Q
Between 3.5Q and 4Q

15.Ram earns an interest of Rs. 600 on a simple interest basis over 2 years. He would earn Rs. 630 on the compound interest basis, on the same interest rate. What is the interest rate?

5%
20%
30%
10%

16.A moneylender takes advantage of poor people and charges 50% interest. He never gets caught because he gives 20% of his total capital (initial capital + profit) as a bribe to the officials. If he has a capital of Rs 25,000 to invest at the beginning of the 4th year, how much bribe did he give at the end of the second year?

Rs 4,900
Rs 5,200
Rs 5,000
Rs 6,000

17.Aman borrowed some money at the rate of 6% per annum for the first two years. He borrowed money at the rate of 9% per annum for the next three years, and at the rate of 14% p.a. for the period beyond 5 years. A total interest of Rs. 11400 is paid at the end of nine years. How much money did he borrow?

Rs. 12,000
Rs. 13,000
Rs. 10,000
Rs. 16,000

18.If a sum becomes 4 times of itself in 15 years at simple interest, determine the rate.

25%
20%
18%
16%

19.A person invests some money in three different schemes for 6 years, 10 years and 12 years at 10%, 12% and 15% rate of Simple Interest respectively. He gets the same interest, at the completion of every scheme. What is the ratio of his investment?

6:3:2
6:9:4
6:1:2
2:3:6

20.A sum of Rs12000 becomes double after 5 years at compound interest. After 20 years, it will become?

Rs. 191671.474
Rs. 191671
Rs. 191670.474
Rs. 191600

21.Sahil invests Rs5000 for 3 years at 5% p.a. compounded interest reckoned yearly. Income tax earned at the rate of 20% on the interest is deducted at the end of each year. Find the amount accumulated at the end of third year.

Rs. 5624.32
Rs. 5623.32
Rs. 5600
Rs. 5624

22. One can purchase a flat from a house building society for ₹ 55000 or on the terms that he should pay ₹ 4275 as cash down payment and the rest in three equal installments. The management charges interest at the rate of 16% p.a. compounded half-yearly. If the flat is purchased under an installment plan, the value of each installment is.

Rs. 19683
Rs. 19680
Rs. 17640
Rs. 20000

23.How much would Adam repay after 5 years if he borrowed Rs. 15000 at the rate of 25% per annum?

33000
33750
33250
33700

24. Two different amounts of Simple interests are earned by a particular amount at the same rate of interest for 2 and 3 years respectively. Calculate their ratio?

1:2
2:3
1:3
3:2

25.If the rate of interest is 10% per annum, what would be the simple interest on Rs. 5000 after 5 years

Rs.2000
Rs. 2500
Rs. 3000
Rs. 2400

Answer Key
1	A
2	B
3	B
4	A
5	C
6	D
7	B
8	A
9	C
10	A
11	A
12	B
13	C
14	D
15	D
16	B
17	A
18	B
19	A
20	A
21	A
22	A
23	B
24	B
25	B

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CAT QA Preparation 2022: Check Compound Interest & Simple Interest Questions and Solutions

CAT Compound Interest & Simple Interest (CI/ SI) Quiz

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Answer Key
1	A
2	B
3	B
4	A
5	C
6	D
7	B
8	A
9	C
10	A
11	A
12	B
13	C
14	D
15	D
16	B
17	A
18	B
19	A
20	A
21	A
22	A
23	B
24	B
25	B

Answer Key
1	A
2	B
3	B
4	A
5	C
6	D
7	B
8	A
9	C
10	A
11	A
12	B
13	C
14	D
15	D
16	B
17	A
18	B
19	A
20	A
21	A
22	A
23	B
24	B
25	B

Answer Key
1	A
2	B
3	B
4	A
5	C
6	D
7	B
8	A
9	C
10	A
11	A
12	B
13	C
14	D
15	D
16	B
17	A
18	B
19	A
20	A
21	A
22	A
23	B
24	B
25	B