MCQ
simple-compound-interest-l2 MCQ - Practice Questions with Answers
Solve 30 simple-compound-interest-l2 questions for RAS/RPSC preparation.
Practice questions
Q1For simple interest on Rs 5000 at 8% per year, what is the interest for the third year only?
Simple interest uses the original principal for every year, so the third year's interest is 8% of Rs 5000, which is Rs 400. Rs 1200 is the interest for all 3 years, and Rs 5400 is an amount after one year, not the asked interest.
Q2Asha invests Rs 1000 at 10 percent per year for 2 years. Under simple interest, what is the interest?
Simple interest is principal multiplied by rate multiplied by time divided by 100. Asha has Rs 1000, 10 percent and 2 years, so the interest is Rs 200. The item checks whether the candidate reads interest, not amount.
Q3For the same principal, the same positive yearly rate, and 2 years, which statement is correct?
With a positive rate and more than one period, compound interest usually becomes greater because each new period starts from the updated amount. Simple interest keeps using the original principal, so options saying it is always greater or always equal miss the change of base.
Q4Match the term with its meaning: Principal, Rate, Amount, Compound interest. Which set is correct?
The matching checks vocabulary precision. If Meena confuses amount with interest or principal with amount, later numerical work becomes unreliable even when she remembers a formula.
Q5Which statement correctly compares simple and compound interest for the same positive rate and more than one year?
After the first compounding interval, compound interest begins to use a larger base. That is why Devika should expect it to be usually greater than simple interest when rate is positive and time is more than one period.
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More questions
6Which year-wise table is best for first showing why simple interest on Rs 2000 at 10% per year for 3 years gives equal interest every year?
7Rs 1000 is compounded annually at 10 percent per year for 2 years. What is the compound interest?
8In an interest problem, what does principal mean?
9Assertion: For Rs 2000 at 5 percent, first-year simple interest and first-year compound interest are equal. Reason: In the first year, both rules use the original principal.
10A learner solves Rs 2000 at 5 percent compound interest for 2 years and writes: first year interest Rs 100, second year interest Rs 100, total interest Rs 200. Which teacher response best names the error?
11A town has a population of 20000. It grows by 5% each year, and each year's growth is calculated on the updated population. Which statement is correct after 2 years?
12A question says: Principal Rs 3000, rate 6% per year, time 2 years, simple interest. Which sequence is the most sensible before calculating?
13Which combination is correct? Statement I: In simple interest, every year uses the original principal. Statement II: In compound interest, the base is updated after each compounding period.
14If simple interest on Rs 5000 for 2 years is Rs 600, what classroom step best helps Devika find the annual rate?
15A learner writes this table for Rs 1000 at 10% compound interest per year. Year 1 starting money Rs 1000, interest Rs 100, ending money Rs 1100. What should be the starting money for Year 2?