Chapter 11

Compound Interest
Exercise 11.1
Q. 1 Find the amount and the compound interest on Rs. 2500 for 2 years
at 10% per annum, compounded annually.
Answer:
Present value = Rs.2500

T IO S I
Interest rate = 10% per annum
NO A D
CO N
Time = 2 years
A
Amount (A) = P (1 + R/100) n

PY
DO U A
[Where, P = Present value
T
ED PR

R = Annual interest rate

n = [Time in years]
C

∴ A = 2500 (1 + 10/100)2
©

⇒ A = 2500 (11/10)2
⇒ A = 2500 × 121/100
⇒ A = 25 × 121
⇒ A = 3025
∴ Amount = Rs.3025
∴ Compound interest = Rs. (3025 – 2500)
= Rs.525
Q. 2 Find the amount and the compound interest on Rs. 15625 for 3
years at 12% per annum, compounded annually.
Answer:
Present value = Rs.15625
Interest rate = 12% per annum
Time = 3 years
Amount (A) = P (1 + R/100) n [Where, P = Present value

T IO S
R = Annual interest rate

I
NO A D
n = Time in years]

CO N
A
∴ A = 15625 (1 + 12/100)3

PY
DO U A
⇒ A = 15625 (112/100)3
T
⇒ A = 15625 (28/25)3
ED PR

⇒ A = 15625 × 21952/15625
C

⇒ A = 21952
©

∴ Amount = Rs.21952
∴ Compound interest = Rs. (21952 – 15625)
= Rs.6327

Q. 3 Find the difference between the simple interest and the compound
interest on Rs. 5000 for 2 years at 9% per annum.
Answer:
Present value = Rs.5000
Interest rate = 9% per annum
Time = 2 years
Simple interest (SI) = PRT/100 [where, P = Present value R = Interest
rate, T = Time]
∴ SI = (5000 × 9 × 2)/100
⇒ SI = 50 × 9 × 2
⇒ SI = 900
Now,
Compound interest (CI),

T IO S
Amount (A) = P (1 + R/100) n [Where, P = Present value

I
NO A D
R = Annual interest rate

CO N
A
n = Time in years]

PY
DO U A
∴ A = 5000 (1 + 9/100)2
T
ED PR

⇒ A = 5000 (109/100)2
⇒ A = 5000 (1.09)2
C

⇒ A = 5000 × 1.1881
©

⇒ A = 5940.5
∴ Amount = Rs.5940.5
∴ Compound interest = Rs. (5940.5 – 5000)
= Rs.940.5
Now,
Difference between the simple interest and the compound interest = (CI
– SI)
= (940.5 – 900)
= 40.5
Q. 4 Ratna obtained a loan of Rs. 25000 from the Syndicate Bank to
renovate her house. If the rate of interest is 8% per annum, what amount
will she have to pay to the bank after 2 years to discharge her debt?
Answer:
Present value = Rs.25000
Interest rate = 8% per annum
Time = 2 years

T IO S
Amount (A) = P (1 + R/100) n [Where, P = Present value

I
NO A D
R = Annual interest rate

CO N
A
n = [Time in years]

PY
∴ A = 25000 (1 + 8/100)2
DO U A
T
⇒ A = 25000 (108/100)2
ED PR

⇒ A = 25000 (1.08)2
C

⇒ A = 25000 × 1.1664
©

⇒ A = 29160
∴ Amount = Rs.29160

Q. 5 Harpreet borrowed Rs. 20000 from her friend at 12% per annum
simple interest. She lent it to Alam at the same rate but compounded
annually. Find her gain after 2 years.
Answer:
Present value = Rs.20000
Interest rate = 12% per annum
Time = 2 years
Simple interest (SI) = PRT/100 [where, P = Present value
R = Interest rate, T = Time]
∴ SI = (20000 × 12 × 2)/100
⇒ SI = 200 × 12 × 2
⇒ SI = 4800
Now,
Amount (A) = P (1 + R/100) n [Where, P = Present value

T IO S I
R = Annual interest rate
NO A D
CO N
n = Time in years]
A
∴ A = 20000 (1 + 12/100)2

PY
DO U A

⇒ A = 20000 (112/100)2
T
ED PR

⇒ A = 20000 (1.12)2
⇒ A = 20000 × 1.2544
C
©

⇒ A = 25088
∴ Amount = Rs.25088
∴ Compound interest = Rs. (25088 – 20000)
= Rs.5088
Now,
(CI – SI) = 5088 -4800
= Rs.288
∴ The amount of money Harpreet will gain after two years = Rs.288
Q. 6 Manoj deposited a sum of Rs. 64000 in a post office for 3 years,
1
compounded annually at 7 % per annum. What amount will he get on
2
maturity?
Answer:
Present value = Rs.64000
Interest rate = (15/2) % per annum
Time = 3 years

T IO S
Amount (A) = P (1 + R/100) n [Where, P = Present value

I
NO A D
R = Annual interest rate

CO N
A
n = [Time in years]

PY
DO U A
∴ A = 64000 [1 + (15/2 × 1/100)]3
T
⇒ A = 64000 [1 + 3/40]3
ED PR

⇒ A = 64000 (43/40)3
C

43 43 43
⇒ A = 64000 × × ×
©

40 40 40

⇒ A = 1 × 43 × 43 × 43
⇒ A = 79507
∴ Manoj will get an amount of Rs.79507 after 3 years.

Q. 7 Divakaran deposited a sum of Rs. 6250 in the Allahabad Bank for 1

year, compounded half-yearly at 8% per annum. Find the compound
interest he gets.
Answer:
Present value = Rs.6250
Interest rate = 8 % per annum
Time = 1 years
∵ Interest is compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 6250 [1 + (8/2)/100]2
⇒ A = 6250 [1 + 4/100]2

T IO S I
⇒ A = 6250 [26/25]2
NO A D
CO N
⇒ A = 6250 × 26/25 × 26/25
A
⇒ A = 10 × 26 × 26

PY
DO U A

⇒ A = 6760
T
ED PR

∴ Amount = Rs.6760
∴ Compound interest = Rs. (6760 – 6250)
C
©

= Rs.510
∴ Divakaran gets a CI of Rs.510.

Q. 8 Michael borrowed Rs.16000 from a finance company at 10% per

annum, compounded half-yearly. What amount of money will discharge
1
his debt after 1 years?
2

Answer:
Present value = Rs.16000
Interest rate = 10% per annum
Time = (3/2) years
∵ Interest is compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 16000 [1 + (10/2)/100]3
⇒ A = 16000 [1 + 5/100]3
⇒ A = 16000 [1 + 1/20]3

T IO S I
⇒ A = 16000 [21/20]3
NO A D
CO N
⇒ A = 16000 × 21/20 × 21/20 × 21/20
A
⇒ A = 2 × 21 × 21 × 21

PY
DO U A

⇒ A = 18522
T
ED PR

∴ Amount = Rs.18522
C
©
 Exercise 11.2
Q. 1 Rs. 6000 for 2 years at 9% per annum compounded annually.
Answer:
Present value = Rs.6000
Interest rate = 9% per annum
Time = 2 years

T IO S
Amount (A) = P (1 + R/100) n [Where, P = Present value

I
R = Annual interest rate
NO A D
CO N
n = Time in years]
A
∴ A = 6000 (1 + 9/100)2

PY
DO U A

⇒ A = 6000 (109/100)2
T
ED PR

⇒ A = 6000 × 109/100 × 109/100

⇒ A = 6 × 109 × 109/10
C
©

⇒ A = 7128.6
∴ Amount = Rs.7128.6
∴ Compound interest = Rs. (7128.6 – 6000)
= Rs.1128.6

Q. 2 Rs. 10000 for 2 years at 11% per annum compounded annually.

Answer:
Present value = Rs.10000
Interest rate = 11% per annum
Time = 2 years
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 10000 (1 + 11/100)2
⇒ A = 10000 (111/100)2
⇒ A = 10000 × 111/100 × 111/100
⇒ A = 1 × 111 × 111

T IO S I
⇒ A = 12321
NO A D
CO N
∴ Amount = Rs.12321
A
∴ Compound interest = Rs. (12321 – 10000)

PY
DO U A

= Rs.2321
T
ED PR

Q. 3 Rs. 31250 for 3 years at 8% per annum compounded annually.

C
©

Answer:
Present value = Rs.31250
Interest rate = 8% per annum
Time = 3 years
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 31250 (1 + 8/100)3
⇒ A = 31250 (1 + 2/25)3
⇒ A = 31250 (27/25)3
⇒ A = 31250 × 27/25 × 27/25 × 27/25
⇒ A = 31250 × 19683/15625
⇒ A = 2 × 19683
⇒ A = 39366
∴ Amount = Rs.39366
∴ Compound interest = Rs. (39366 – 31250)

T IO S
= Rs.8116

I
NO A D
CO N
Q. 4 Rs. 10240 for 3 years at 12% per annum compounded annually.
A
Answer:

PY
DO U A

Present value = Rs.10240

T
ED PR

Interest rate = (25/2) % per annum

Time = 3 years
C

Amount (A) = P (1 + R/100) n [Where, P = Present value

©

R = Annual interest rate

n = Time in years]
∴ A = 10240 [1 + (25/2)/100]3
⇒ A = 10240 [1 + 1/8]3
⇒ A = 10240 [9/8]3
⇒ A = 10240 × 9/8 × 9/8 × 9/8
⇒ A = 10240 × 729/512
⇒ A = 20 × 729
⇒ A = 14580
∴ Amount = Rs.14580
∴ Compound interest = Rs. (14580 – 10240)
= Rs.4340

Q. 5 Rs. 62500 for 2 years 6 months at 12% per annum compounded

annually.
Answer:

T IO S
Present value = Rs.62500

I
NO A D
Interest rate = 12 % per annum

CO N
A
Time = 2 years 6 month = (2 + 1/2) years = (5/2) years

PY
DO U A
Amount (A) = P (1 + R/100) n [Where, P = Present value
T
ED PR

R = Annual interest rate

n = Time in years]
C

∴ A = 62500 (1 + 12/100)2 × [1 + (1/2 × 12)/100]

©

⇒ A = 62500 (1 + 3/25)2 × [1 + 6/100]

⇒ A = 62500 (28/25)2 × [106/100]
⇒ A = 62500 × 28/25 × 28/25 × 106/100
⇒ A = 625 × 784/625 × 106
⇒ A = 1 × 784 × 106
⇒ A = 83104
∴ Amount = Rs.83104
∴ Compound interest = Rs. (83104 – 62500)
= Rs.20604
Q. 6 Rs. 9000 for 2 years 4 months at 10% per annum compounded
annually.
Answer:
Present value = Rs.9000
Interest rate = 10 % per annum
Time = 2 years 4 month = (2 + 1/3) years = (7/2) years
Amount (A) = P (1 + R/100) n × [1 + (1/3 × R)/100]

T IO S
[Where, P = Present value

I
NO A D
R = Annual interest rate

CO N
A
n = Time in years]

PY
DO U A
∴ A = 9000 (1 + 10/100)2 × [1 + (1/3 × 10)/100]
T
⇒ A = 9000 (1 + 1/10)2 × [1 + 1/30]
ED PR

⇒ A = 9000 (11/10)2 × [31/30]

C

⇒ A = 9000 × 121/100 × 31/30

©

⇒ A = 9 × 121 × 31/3
⇒ A = 3 × 121 × 31
⇒ A = 11253
∴ Amount = Rs.11253
∴ Compound interest = Rs. (11253 – 9000)
= Rs.2253

Q. 7 Find the amount of Rs. 8000 for 2 years compounded annually and
the rates being 9% per annum during the first year and 10% per annum
during the second year.
Answer:
Present value = Rs.8000
Interest rate for 1st year, p = 9 % per annum
Interest rate for 2nd year, q = 10 % per annum
Time = 2 years
Amount (A) = P × (1 + p/100) × (1 + q/100)
A = 8000 × (1 + 9/100) × (1 + 10/100)

T IO S I
= 8000 × (109/100) × (1 + 1/10)
NO A D
CO N
= 8000 × 109/100 × 11/10
A
= 8 × 109 × 11

PY
DO U A
= 9592
T
ED PR

∴ Amount = Rs.9592
C

Q. 8 Anand obtained a loan of Rs. 125000 from the Allahabad Bank for
©

buying computers. The bank charges compound interest at 8% per

annum, compounded annually. What amount will he have to pay after 3
years to clear the debt?
Answer:
Present value = Rs.125000
Interest rate = 8% per annum
Time = 3 years
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 125000 (1 + 8/100)3
⇒ A = 125000 (108/100)3
⇒ A = 125000 × 108/100 × 108/100 × 108/100
⇒ A = 125000 × 1259712/1000000
⇒ A = 125 × 1259712/1000
⇒ A = 1259712/8

T IO S
⇒ A = 157464

I
∴ Amount = Rs.157464
NO A D
CO N
∴ Anand has to pay Rs.157464 after 3 years to clear the debt.
A

PY
DO U A

Q. 9 Three years ago, Beeru purchased a buffalo from Surjeet for Rs.
T
ED PR

11000. What payment will discharge his debt now, the rate of interest
being 10% per annum, compounded annually?
C

Answer:
©

Present value = Rs.11000

Interest rate = 10% per annum
Time = 3 years
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 11000 (1 + 10/100)3
⇒ A = 11000 (1 + 1/10)3
⇒ A = 11000 (11/10)3
⇒ A = 11000 × 11/10 × 11/10 × 11/10
⇒ A = 11000 × 1331/1000
⇒ A = 11 × 1331
⇒ A = 14641
∴ Amount = Rs.14641
∴ Beeru has to pay Rs.14641 to clear the debt.

T IO S I
Q. 10 Shubhalaxmi took a loan of Rs. 18000 from Surya Finance to
NO A D
purchase a TV set. If the company charges compound interest at 12%

CO N
A
per annum during the first year and 12% per annum during the second

PY
year, how much will she have to pay after 2 years?
DO U A

Answer:
T
ED PR

Present value = Rs.18000

Interest rate for 1st year, p = 12 % per annum
C
©

Interest rate for 2nd year, q = (25/2) % per annum

Time = 2 years
Amount (A) = P × (1 + p/100) × (1 + q/100)
A = 18000 × (1 + 12/100) × [1 + (25/2)/100]
= 18000 × (112/100) × [1 + 25/200]
= 18000 × (112/100) × [1 + 1/8]
= 18000 × 112/100 × 9/8
= 180 × 112 × 9/8
= 180 × 14 × 9
= 22680
∴ Amount = Rs.22680
∴ Shubhalaxmi has to pay Rs.157464 after 2 years.

Q. 11 Neha borrowed Rs. 24000 from the State Bank of India to buy a
scooter. If the rate of interest be 10% per annum compounded annually,
what payment will she have to make after 2 years 3 months?
Answer:

T IO S
Present value = Rs.24000

I
NO A D
Interest rate = 10 % per annum

CO N
A
1
Time = 2 years 3 month = (2 + 1/4) years = 2 years.
4

PY
DO U A
Amount (A) = P (1 + R/100) n × [1 + (1/4 × R)/100]
T
ED PR

[Where, P = Present value

R = Annual interest rate
C

n = Time in years]
©

∴ A = 24000 (1 + 10/100)2 × [1 + (1/4 × 10)/100]

⇒ A = 24000 (1 + 1/10)2 × [1 + 1/40]
⇒ A = 24000 (11/10)2 × [41/40]
⇒ A = 24000 × 121/100 × 41/40
⇒ A = 24 × 121 × 41/4
⇒ A = 6 × 121 × 41
⇒ A = 29766
∴ Amount = Rs.29766
∴ Neha should pay Rs. 29766 to the bank after 2 years 3 months.
 1
Q. 12 Abhay borrowed Rs. 16000 at 7 % per annum simple interest. On
2
the same day, he lent it to Gurmeet at the same rate but compounded
annually. What does he gain at the end of 2 years?
Answer:
Present value = Rs.16000
1
Interest rate = 7 % = (15/2) % per annum
2

T IO S
Time = 2 years

I
Simple interest (SI) = PRT/100 [where, P = Present value
NO A D
CO N
R = Interest rate, T = Time]
A
∴ SI = (16000 × (15/2) × 2)/100

PY
DO U A

⇒ SI = 160 × 15
T
ED PR

⇒ SI = 2400
Now,
C
©

Amount (A) = P (1 + R/100) n [Where, P = Present value

R = Annual interest rate
n = Time in years]
∴ A = 16000 [1 + (15/2)/100]2
⇒ A = 16000 [1 + 3/40]2
⇒ A = 16000 [43/40]2
⇒ A = 16000 × 1849/1600
⇒ A = 10 × 1849
⇒ A = 18490
∴ Amount = Rs.18490
∴ Compound interest = Rs. (18490 – 16000)
= Rs.2490
Now,
(CI – SI) = 2490 -2400
= Rs.90
∴ Abhay gains Rs.90 at the end of 2 years.

T IO S I
Q. 13 The simple interest on a sum of money for 2 years at 8% per
NO A D
annum is Rs. 2400. What will be the compound interest on that sum at

CO N
A
the same rate and for the same period?

PY
Answer:
DO U A
T
Simple interest = Rs.2400
ED PR

Interest rate = 8% per annum

C

Time = 2 years
©

Simple interest (SI) = PRT/100 [where, P = Present value

R = Interest rate
∴ 2400 = (P × 8 × 2)/100 T = Time]
⇒ 2400 = P × 16/100
⇒ 2400 = P × 4/25
⇒ P = 2400 × 25/4
⇒ P = 600 × 25
⇒ P = 15000
∴ Sum = Rs.15000
Now,
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 15000 [1 + 8/100]2
⇒ A = 15000 [1 + 2/25]2
⇒ A = 15000 [27/25]2
⇒ A = 15000 × 27/25 × 27/25

T IO S I
⇒ A = 600 × 27 × 27/25
NO A D
CO N
⇒ A = 24 × 27 × 27
A
⇒ A = 17496

PY
DO U A

∴ Amount = Rs.17496
T
ED PR

∴ Compound interest = Rs. (17496 – 15000)

= Rs.2496
C
©

Q. 14 The difference between the compound interest and the simple

interest on a certain sum for 2 years at 6% per annum is Rs. 90. Find the
sum.
Answer:
Let sum = P
Interest rate = 6% per annum
Time = 2 years
Simple interest (SI) = PRT/100 [Where, P = Present value
R = Annual interest rate
T = Time in years]
∴ SI = (P × 6 × 2)/100
⇒ SI = 3P/25 __________ (i)
Compound interest (CI) = P (1 + R/100) n - P [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ CI = P (1 + 6/100)2 - P
⇒ CI = P (1 + 3/50)2 - P

T IO S I
⇒ CI = P (53/50)2 - P
NO A D
CO N
⇒ CI = (2809P/2500)- P
A
⇒ CI = (2809P – 2500P)/2500

PY
DO U A

⇒ CI = 309P/2500 ______ (ii)

T
ED PR

Now,
CI – SI = (309P/2500) – (3P/25)
C

⇒ 90 = (309P/2500) – (3P/25) [Given, CI – SI = 90]

©

⇒ 90 = (309P – 300P)/2500
⇒ 90 = 9P/2500
⇒ P = 90 × 2500/9
⇒ P = 10 × 2500
⇒ P = 25000
∴ Sum = Rs.25000
Q. 15 The difference between the compound interest and the simple
interest on a certain sum for 3 years at 10% per annum is Rs. 93. Find
the sum.
Answer:
Let sum = P
Interest rate = 10% per annum
Time = 3 years

T IO S
Simple interest (SI) = PRT/100 [Where, P = Present value

I
NO A D
R = Annual interest rate

CO N
A
T = Time in years]

PY
∴ SI = (P × 10 × 3)/100
DO U A
T
⇒ SI = 3P/10 ______ (i)
ED PR

Compound interest (CI) = P (1 + R/100) n - P [Where, P = Present value

C

R = Annual interest rate

©

n = [Time in years]
∴ CI = P (1 + 10/100)3 - P
⇒ CI = P (1 + 1/10)3 - P
⇒ CI = P (11/10)3 - P
⇒ CI = (1331P/1000)- P
⇒ CI = (1331P – 1000P)/1000
⇒ CI = 331P/1000 ______ (ii)
Now,
CI – SI = (331P/1000) – (3P/10)
⇒ 93 = (331P/1000) – (3P/10) [Given, CI – SI = 93]
⇒ 93 = (331P – 300P)/1000
⇒ 93 = 31P/1000
⇒ P = 93 × 1000/31
⇒ P = 3 × 1000
⇒ P = 3000
∴ Sum = Rs.3000

T IO S I
2
Q. 16 A sum of money amounts to Rs. 10240 in 2 years at 6 % per
NO A D 3

CO N
annum, compounded annually. Find the sum.
A
Answer:

PY
DO U A

Let sum = P
T
ED PR

2
Interest rate = 6 % = (20/3) % per annum
3
C

Time = 2 years
©

Now,
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = [Time in years]
∴ A = P [1 + (20/3)/100]2
⇒ 10240 = P [1 + 1/15]2
⇒ 10240 = P [16/15]2
⇒ 10240 = P × 256/225
⇒ P = 10240 × 225/256
⇒ P = 40 × 225
⇒ P = 9000
∴ Sum = Rs.9000

Q. 17 What sum of money will amount to Rs. 21296 in 3 years at 10%

per annum, compounded annually?
Answer:
Let sum = P

T IO S
Interest rate = 10% per annum

I
NO A D
Time = 3 years

CO N
A
Now,

PY
DO U A
Amount (A) = P (1 + R/100) n [Where, P = Present value
T
ED PR

R = Annual interest rate

n = [Time in years]
C

∴ A = P (1 + 10/100)3
©

⇒ 21296 = P (1 + 1/10)3
⇒ 21296 = P (11/10)3
⇒ 21296 = P × 1331/1000
⇒ P = 21296 × 1000/1331
⇒ P = 16 × 1000
⇒ P = 16000
∴ Sum = Rs.16000

Q. 18 At what rate per cent per annum will Rs. 4000 amount to Rs. 4410
in 2 years when compounded annually?
Answer:
Let rate = R % per annum
P = Rs.4000
A = Rs.4410
Time = 2 years
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound

T IO S
interest

I
NO A D
P = Present value

CO N
A
R = Annual interest rate

PY
DO U A
n = [Time in years]
T
∴ A = P (1 + R/100)2
ED PR

⇒ 4410 = 4000 (1 + R/100)2

C

⇒ (1 + R/100)2 = 4410/4000
©

⇒ (1 + R/100)2 = 441/400
⇒ (1 + R/100) = √ (441/400)
⇒ R/100 = (21/20) - 1
⇒ R/100 = (21 – 20)/20
⇒ R/100 = 1/20
⇒ R = 100/20
⇒R=5
∴ Rate = 5% per annuam.
Q. 19 At what rate per cent per annum will Z 640 amount to Rs. 774.40
in 2 years when compounded annually?
Answer:
Let rate = R % per annum
P = Rs.640
A = Rs.774.40
Time = 2 years

T IO S
Now,

I
NO A D
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound

CO N
A
interest

PY
P = Present value
DO U A
T
R = Annual interest rate
ED PR

n = [Time in years]
∴ A = P (1 + R/100)2
C
©

⇒ 774.40 = 640 (1 + R/100)2

⇒ (1 + R/100)2 = 774.40/640
⇒ (1 + R/100)2 = 1.21
⇒ (1 + R/100) = √ (1.21)
⇒ R/100 = (1.1) - 1
⇒ R/100 = 0.1
⇒ R = 0.1 × 100
⇒ R = 10
∴ Rate = 10% per annuam.
Q. 20 In how many years will Rs. 1800 amount to Rs. 2178 at 10% per
annum when compounded annually?
Answer:
Let time = n years
P = Rs.1800
A = Rs.2178
R = 10% per annum

T IO S
Now,

I
NO A D
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound

CO N
A
interest

PY
P = Present value
DO U A
T
R = Annual interest rate
ED PR

n = [Time in years]
∴ A = P (1 + R/100) n
C
©

⇒ 2178 = 1800 (1 + 10/100) n

⇒ (1 + 1/10) n = 2178/1800
⇒ (11/10) n = 121/100
⇒ (11/10) n = (11/10)2
⇒n=2
∴ Time = 2 years.

Q. 21 In how many years will Rs. 6250 amount to Rs. 7290 at 8% per
annum, compounded annually?
Answer:
Let time = n years
P = Rs.6250
A = Rs.7290
R = 8% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest

T IO S
P = Present value

I
NO A D
R = Annual interest rate

CO N
A
n = [Time in years]

PY
DO U A
∴ A = P (1 + R/100) n
T
⇒ 7290 = 6250 (1 + 8/100) n
ED PR

⇒ (1 + 2/25) n = 7290/6250
C

⇒ (27/25) n = 729/625
©

⇒ (27/25) n = (27/25)2
⇒n=2
∴ Time = 2 years.

Q. 22 The population of a town is 125000. It is increasing at the rate of

2% per annum. What will be its population after 3 years?
Answer:
Population of a town, P = 125000
Time, n = 3 years
Increasing rate, R = 2% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = [Time in years]
∴ Population = P (1 + R/100) n

T IO S
= 125000 (1 + 2/100)3

I
NO A D
= 125000 (1 + 1/50)3

CO N
A
= 125000 (51/50)3

PY
DO U A
= 125000 × 51/50 × 51/50 × 51/50
T
ED PR

= 1 × 51 × 51 × 51
= 132651
C

∴ Population of a town after 3 years is 132651.

©

Q. 23 Three years ago, the population of a town was 50000. If the annual
increase during three successive years be at the rate of 5%, 4% and 3%
respectively, what is its present population?
Answer:
Population of a town, P = 50000
Interest rate for 1st year, p = 5%
Interest rate for 2nd year, q = 4%
Interest rate for 3rd year, r = 3%
Time, n = 3 years
Now,
Present population = P × (1 + p/100) × (1 + q/100) × (1 + r/100)
= 50000 × (1 + 5/100) × (1 + 4/100) × (1 + 3/100)
= 50000 × (1 + 1/20) × (1 + 1/25) × (1 + 3/100)
= 50000 × 21/20 × 26/25 × 103/100
= 50 × 21/2 × 26/25 × 103
= 1 × 21 × 26 × 103

T IO S I
= 56238
NO A D
CO N
∴ Present population of a town is 56238.
A

PY
DO U A
Q. 24 The population of a city was 120000 in the year 2013. During next
T
ED PR

year it increased by 6% but due to an epidemic it decreased by 5% in the

following year. What was its population in the year 2015?
C

Answer:
©

Population of a city in 2013, P = 120000

Time, n = 3 years
Increasing rate, R = 6% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴Population of the city in the year 2014,
∴ Population = P (1 + R/100) n
= 120000 (1 + 6/100)1
= 120000 (1 + 3/50)
= 120000 (53/50)
= 120000 × 53/50
= 2400 × 53
= 127200

T IO S I
∴ Population of a city in 2014 is 127200.
NO A D
CO N
Now,
A
Decreasing rate = 8%

PY
DO U A
∴Population of the city in the year 2015,
T
ED PR

∴ Population = P (1 - R/100) n
= 127200 (1 - 5/100)1
C
©

= 127200 (1 - 1/20)
= 127200 (19/20)
= 127200 × 19/20
= 6360 × 19
= 120840
∴ Population of a city in 2015 is 120840.

Q. 25 The count of bacteria in a certain experiment was increasing at the

rate of 2% per hour. Find the bacteria at the end of 2 hours if the count
was initially 500000.
Answer:
Count of bacteria, P = 500000
Time, n = 2 hours
Increasing rate, R = 2% per hour
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value

T IO S
R = Annual interest rate

I
NO A D
n = [Time]

CO N
A
∴ Count of bacteria = P (1 + R/100) n

PY
DO U A
= 500000 (1 + 2/100)2
T
= 500000 (102/100)2
ED PR

= 500000 × 102/100 × 102/100

C

= 50 × 102 × 102
©

= 520200
∴ Count of bacteria at the end of 2 hours is 520200.

Q. 26 The bacteria in a culture grows by 10% in the first hour, decreases

by 10% in the second hour and again increases by 10% in the third hour.
Find the bacteria at the end of 3 hours if the count was initially 20000.
Answer:
Initial count of bacteria, P = 20000
Time, n = 3 hours
Increasing rate, R = 10% per hour
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time]
∴Count of bacteria at the end of 1st hour,

T IO S
∴ Count of bacteria = P (1 + R/100) n

I
NO A D
= 20000 (1 + 10/100)1

CO N
A
= 20000 (1 + 1/10)

PY
DO U A
= 20000 (11/10)
T
ED PR

= 20000 × 11/10
= 2000 × 11
C

= 22000
©

∴ Count of bacteria at the end of 1st hour is 22000.

Now,
Decreasing rate = 10%
∴Count of bacteria at the end of 2nd hour,
∴ Count of bacteria = P (1 + R/100) n
= 22000 (1 - 10/100)1
= 22000 (1 - 1/10)
= 22000 × 9/10
= 2200 × 9
= 19800
∴ Count of bacteria at the end of 2nd hours are 19800.
Now,
Increasing rate = 10%
∴ Count of bacteria at the end of 3rd hour,
∴ Count of bacteria = P (1 + R/100) n
= 19800 (1 + 10/100)1

T IO S I
= 19800 (1 + 1/10)
NO A D
CO N
= 19800 (11/10)
A
= 19800 × 11/10

PY
DO U A
= 1980 × 11
T
ED PR

= 21780
∴ Count of bacteria at the end of 3rd hours are 21780.
C
©

Q. 27 A machine is purchased for Rs. 625000. Its value depreciates at

the rate of 8% per annum. What will be its value after 2 years?
Answer:
Present value of machine, P = Rs.625000
Time, n = 2 years
Rate of depreciates, R = 8% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Value = P (1 - R/100) n [∵ Rate decreases]
= 625000 (1 - 8/100)2
= 625000 (1 - 2/25)2
= 625000 (23/25)2
= 625000 × 729/625

T IO S I
= 1000 × 529
NO A D
CO N
= 529000
A
∴ Value of machine after 2 years will be Rs.529000.

PY
DO U A
T
ED PR

Q. 28 A scooter is bought at Rs. 56000. Its value depreciates at the rate

of 10% per annum. What will be its value after 3 years?
C

Answer:
©

Present value of scooter, P = Rs.56000

Time, n = 3 years
Rate of depreciates, R = 10% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Value = P (1 - R/100) n [∵ Rate decreases]
= 56000 (1 - 10/100)3
= 56000 (1 - 1/10)3
= 56000 (9/10)3
= 56000 × 729/1000
= 56 × 729
= 40824
∴ Value of scooter after 3 years will be Rs.40824.

T IO S I
NO A D
CO N
Q. 29 A car is purchased for Rs. 348000. Its value depreciates at 10%
A
per annum during the first year and at 20% per annum during the second

PY
year. What will be its value after 2 years?
DO U A
T
Answer:
ED PR

Present value of car, P = Rs.348000

C

Rate of depreciates for 1st year, p = 10%

©

Rate of depreciates for 2nd year, q = 20%

Time, n = 2 years
Now,
Value = P × (1 - p/100) × (1 - q/100)
= 348000 × (1 - 10/100) × (1 - 20/100)
= 348000 × (1 - 1/10) × (1 - 1/5)
= 348000 × 9/10 × 4/5
= 34800 × 9 × 4/5
= 6960 × 9 × 4
= 25056
∴ Value of the car after 2 years is Rs.25056.

Q. 30 The value of a machine depreciates at the rate of 10% per annum.

It was purchased 3 years ago. If its present value is Rs. 291600, for how
much was it purchased?
Answer:
Let the 3 years ago machine value = P

T IO S
Rate of depreciates, R = 10%

I
NO A D
Time, n = 3 years

CO N
A
Now,

PY
Value = P (1 + R/100) n [Where,
DO U A
T
P = Present value
ED PR

R = Annual interest rate

C

n = Time in years]
©

∴ Value = P (1 - 10/100) n [∵ Rate decreases]

⇒ 291600 = P (1 - 1/10)3
⇒ 291600 = P (9/10)3
⇒ 291600 = P × 729/1000
⇒ P = 291600 × 1000/729
⇒ P = 400 × 1000
⇒ P = 400000
∴ Initial value of machine is Rs.400000.
 Exercise 11.3

Q. 1 Find the amount and the compound interest on Rs. 8000 for 1 year
at 10% per annum, compounded half-yearly.
Answer:
Present value, P = Rs.8000
Interest rate, R = 10% per annum

T IO S I
Time, n = 1 years
NO A D
∵ Compounded half-yearly.

CO N
A
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value

PY
DO U A
R = Annual interest rate
T
ED PR

n = Time in years]
∴ A = 8000 [1 + (10/2)/100]2
C

⇒ A = 8000 [1 + 5/100]2
©

⇒ A = 8000 [1 + 1/20]2
⇒ A = 8000 [21/20]2
⇒ A = 8000 × 441/400
⇒ A = 20 × 441
⇒ A = 8820
∴ Amount = Rs.8820
∴ Compound interest = Rs. (8820 – 8000) [∵CI = A – P]
= Rs.820
 1
Q. 2 Find the amount and the compound interest on Rs. 31250 for 1 %
2
years at 8% per annum, compounded half-yearly.
Answer:
Present value, P = Rs.31250
Interest rate, R = 8% per annum
Time, n = (3/2) years
∵ Compounded half-yearly.

T IO S I
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
NO A D
CO N
R = Annual interest rate
A
n = Time in years]

PY
DO U A

∴ A = 31250 [1 + (8/2)/100]3 [2n = 2 × 3/2]

T
ED PR

⇒ A = 31250 [1 + 4/100]3
⇒ A = 31250 [1 + 1/25]3
C
©

⇒ A = 31250 [26/25]3
⇒ A = 31250 × 17576/15625
⇒ A = 2 × 17576
⇒ A = 35152
∴ Amount = Rs.35152
∴ Compound interest = Rs. (35152 – 31250) [∵CI = A – P]
= Rs.3902

Q. 3 Find the amount and the compound interest on Rs. 12800 for 1 year
1
at 7 % per annum, compounded half-yearly.
2
Answer:
Present value, P = Rs.12800
Interest rate, R = (15/2) % per annum
Time, n = 1 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value

T IO S
R = Annual interest rate

I
n = Time in years]
NO A D
CO N
∴ A = 12800 [1 + (15/4)/100]2
A
⇒ A = 12800 [1 + 3/80]2

PY
DO U A

⇒ A = 12800 [83/80]2
T
ED PR

⇒ A = 12800 × 6889/6400
⇒ A = 128 × 6889/64
C
©

⇒ A = 2 × 6889
⇒ A = 13778
∴ Amount = Rs.13778
∴ Compound interest = Rs. (13778 – 12800) [∵CI = A – P]
= Rs.978

Q. 4 Find the amount and the compound interest on Rs. 160000 for 2
years at 10% per annum, compounded half-yearly.
Answer:
Present value, P = Rs.160000
Interest rate, R = 10% per annum
Time, n = 2 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 160000 [1 + (10/2)/100]4

T IO S I
⇒ A = 160000 [1 + 5/100]4
NO A D
CO N
⇒ A = 160000 [1 + 1/20]4
A
⇒ A = 160000 [21/20]4

PY
DO U A

⇒ A = 160000 × 21/20 × 21/20 × 21/20 × 21/20

T
ED PR

⇒ A = 160000 × 194481/160000
⇒ A = 1 × 194481
C
©

⇒ A = 194481
∴ Amount = Rs.8820
∴ Compound interest = Rs. (194481 – 160000) [∵CI = A – P]
= Rs.34481

Q. 5 Swati borrowed Rs. 40960 from a bank to buy a piece of land. If the
1
bank charges 12 % per annum, compounded half-yearly, what amount
2
1
will she have to pay after 1 years? Also, find the interest paid by her.
2

Answer:
Present value, P = Rs.40960
Interest rate, R = (25/2) % per annum
Time, n = 3/2 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 40960 [1 + (25/4)/100]3 [R = 25/2 and n = 3/2 years]

T IO S I
⇒ A = 40960 [1 + 1/16]3
NO A D
CO N
⇒ A = 40960 [17/16]3
A
⇒ A = 40960 × 4913/4096

PY
DO U A

⇒ A = 10 × 4913
T
ED PR

⇒ A = 49130
∴ Amount = Rs.49130
C

∴ Compound interest = Rs. (49130 – 40960) [∵CI = A – P]

©

= Rs.8170

Q. 6 Mohd. Aslam purchased a house from Avas Vikas Parishad on

credit. If the cost of the house is Rs. 125000 and the Parishad charges
interest at 12% per annum compounded half-yearly, find the interest
paid by Aslam after a year and a half.
Answer:
Initial value, P = Rs.125000
Interest rate, R = 12% per annum
Time, n = (1 + 1/2) years = 3/2 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 125000 [1 + (12/2)/100]3 [n = 3/2 years]
⇒ A = 125000 [1 + 6/100]3
⇒ A = 125000 [1 + 3/50]3

T IO S I
⇒ A = 125000 [53/50]3
NO A D
CO N
⇒ A = 125000 × 53/50 × 53/50 × 53/50
A
⇒ A = 125000 × 148877/125000

PY
DO U A

⇒ A = 1 × 148877
T
ED PR

⇒ A = 148877
∴ Amount = Rs.148877
C
©

∴ Compound interest = Rs. (148877 – 125000) [∵CI = A – P]

= Rs.23877
∴ Rs.23877 interest paid by Aslam after (3/2) years.

Q. 7 Sheela deposited Rs. 20000 in a bank, where the interest is credited

half-yearly. If the rate of interest paid by the bank is 6% per annum,
what amount will she get after 1 year?
Answer:
Present value, P = Rs.20000
Interest rate, R = 6% per annum
Time, n = 1 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 20000 [1 + (6/2)/100]2
⇒ A = 20000 [1 + 3/100]2

T IO S I
⇒ A = 20000 [103/100]2
NO A D
CO N
⇒ A = 20000 × 103/100 × 103/100
A
⇒ A = 2 × 103 × 103

PY
DO U A

⇒ A = 21218
T
ED PR

∴ Amount = Rs.21218
∴ Shella gets Rs.21218 after 1 year.
C
©

1
Q. 8 Neeraj lent Rs. 65536 for 2 years at 12 % per annum, compounded
2
annually. How much 2 more could he earn if the interest were
compounded half-yearly?
Answer:
Initial value, P = Rs.65536
Interest rate, R = (25/2) % per annum
Time, n = 2 years
∵ Compounded annually.
∴ Amount (A) = P [1 + R/100] n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 65536 [1 +(25/2) /100]2
⇒ A = 65536 [1 + 1/8]2
⇒ A = 65536 [9/8]2
⇒ A = 65536 × 9/8 × 9/8
⇒ A = 65536 × 81/64

T IO S I
⇒ A = 1024 × 81
NO A D
CO N
⇒ A = 82944
A
∴ Amount = Rs.82944

PY
DO U A

∴ Compound interest = Rs. (82944 – 65536) [∵CI = A – P]

T
ED PR

= Rs.17408
Now,
C
©

∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 65536 [1 + (25/4)/100]4 [R = (25/2) % and n = 2 years]
⇒ A = 65536 [1 + 1/16]4
⇒ A = 65536 [17/16]4
⇒ A = 65536 × 17/16 × 17/16 × 17/16 × 17/16
⇒ A = 65536 × 83521/65536
⇒ A = 1 × 83521
⇒ A = 83521
∴ Amount = Rs.83521
∴ Compound interest = Rs. (83521 – 65536) [∵CI = A – P]
= Rs.17985
Now,
Difference between interests compound half-yearly and yearly,
= Rs. (17985 – 17408)

T IO S I
= Rs.577
NO A D
CO N
A
Q. 9 Sudershan deposited Rs. 32000 in a bank, where the interest is

PY
DO U A
credited quarterly. If the rate of interest be 5% per annum, what amount
T
will he receive after 6 months?
ED PR

Answer:
C

Present value, P = Rs.32000

©

Interest rate, R = 5% per annum

Time, n = 6 months = (1/2) years
∵ Compounded quarterly,
∴ Amount (A) = P [1 + (R/4)/100]4n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 362000 [1 + (5/4)/100]2 [4n = 4 × 1/2]
⇒ A = 32000 [1 + 1/80]2
⇒ A = 32000 [81/80]2
⇒ A = 32000 × 81/80 × 81/80
⇒ A = 400 × 81 × 81/80
⇒ A = 5 × 81 × 81
⇒ A = 32805
∴ Amount = Rs.32805
∴ Sudershan will receive amount of Rs.32805 after 6 months.

T IO S
Q. 10 Arun took a loan of Rs. 390625 from Kuber Finance. If the
company charges interest at 16% per annum, compounded quarterly,

I
NO A D
what amount will discharge his debt after one year?

CO N
A
Answer:

PY
Present value, P = Rs.390625
DO U A
T
Interest rate, R = 16% per annum
ED PR

Time, n = 1 year
C

∵ Compounded quarterly,
©

∴ Amount (A) = P [1 + (R/4)/100]4n [Where, P = Present value

R = Annual interest rate
n = Time in years]
∴ A = 390625 [1 + (16/4)/100]4
⇒ A = 390625 [1 + 4/100]4
⇒ A = 390625 [1 + 1/25]4
⇒ A = 390625 [26/25]4
⇒ A = 390625 × 26/25 × 26/25 × 26/25 × 26/25
⇒ A = 390625 × 456976/390625
⇒ A = 1 × 456976
⇒ A = 456976
∴ Amount = Rs.456976
∴ Arun has to pay Rs.45976 after 1 year.

T IO S I
NO A D
CO N
A

PY
DO U A
T
ED PR
C
©
 Exercise 11.4

Q. 1 The compound interest on Z 5000 at 8% per annum for 2 years,

compounded annually, is
A. Rs. 800
B. Rs. 825
C. Rs. 832

T IO S
D. Rs.850

I
NO A D
Answer:

CO N
A
Present value, P = Rs.5000

PY
DO U A
Interest rate, R = 8% per annum
T
ED PR

Time, n = 2 years
∴ Amount (A) = P (1 + R/100) n [Where, P = Present value
C

R = Annual interest rate

©

n = Time in years]
∴ A = 5000 (1 + 8/100)2
⇒ A = 5000 (1 + 2/25)2
⇒ A = 5000 (27/25)2
⇒ A = 5000 × 27/25 × 27/25
⇒ A = 200 × 27 × 27/25
⇒ A = 8 × 27 × 27
⇒ A = 5832
∴ Amount = Rs.5832
∴ Compound interest = Rs. (5832 – 5000) [∵CI = A – P]
= Rs.832

Q. 2 The compound interest on Z 10000 at 10% per annum for 3 years,

compounded annually, is
A. Rs. 1331
B. Rs.3310

T IO S
C. Rs.3130

I
NO A D
D. Rs. 13310

CO N
A
Answer:

PY
DO U A
Present value, P = Rs.10000
T
ED PR

Interest rate, R = 8% per annum

Time, n = 3 years
C

∴ Amount (A) = P (1 + R/100) n [Where, P = Present value

©

R = Annual interest rate

n = Time in years]
∴ A = 10000 (1 + 10/100)3
⇒ A = 10000 (1 + 1/10)3
⇒ A = 10000 (11/10)3
⇒ A = 10000 × 11/10 × 11/10 × 11/10
⇒ A = 10 × 11 × 11 × 11
⇒ A = 13310
∴ Amount = Rs.13310
∴ Compound interest = Rs. (13310 – 10000) [∵CI = A – P]
= Rs.3310

Q. 3 The compound interest on Z 10000 at 12% per annum for 1years,

compounded annually, is
A. Rs. 1872
B. Rs. 1720

T IO S
C. Rs. 1910.16

I
NO A D
D. Rs. 1782

CO N
A
Answer:

PY
DO U A
Present value, P = Rs.10000
T
ED PR

Interest rate, R = 12% per annum

Time, n = 1 years
C

∴ Amount (A) = P (1 + R/100) n × [1 + (R/2)/100] [Where, P = Present

©

value
R = Annual interest rate
n = Time in years]
∴ A = 10000 (1 + 12/100)1 × [1 + (12/2)/100]
⇒ A = 10000 (1 + 12/100) × [1 + 6/100]
⇒ A = 10000 (112/100) × [106/100]
⇒ A = 10000 × 112/100 × 106/100
⇒ A = 1 × 112 × 106
⇒ A = 11872
∴ Amount = Rs.11872
∴ Compound interest = Rs. (11872 – 10000) [∵CI = A – P]
= Rs.1872

Q. 4 The compound interest on Rs. 4000 at 10% per annum for 2 years 3
months, compounded annually, is
A. Rs. 916
B. Rs. 900

T IO S
C. Rs. 961

I
NO A D
D. Rs. 896

CO N
A
Answer:

PY
DO U A
Present value, P = Rs.4000
T
ED PR

Interest rate, R = 10% per annum

Time, n =2 years 3 months = (2 + 1/4) years
C

∴ Amount (A) = P (1 + R/100) n × [1 + (R/4)/100] [Where, P = Present

©

value
R = Annual interest rate
n = Time in years]
∴ A = 4000 (1 + 10/100)2 × [1 + (10/4)/100]
⇒ A = 4000 (1 + 1/10)2 × [1 + 1/40]
⇒ A = 4000 (11/10)2 × [41/40]
⇒ A = 4000 × 121/100 × 41/40
⇒ A = 40 × 121 × 41/40
⇒ A = 121 × 41
⇒ A = 4961
∴ Amount = Rs.4961
∴ Compound interest = Rs. (4961 – 4000) [∵CI = A – P]
= Rs.961

Q. 5 A sum of Rs. 25000 was given as loan on compound interest for 3

years compounded annually at 5% per annum during the first year, 6%
per annum during the second year and 8% per annum during the third

T IO S
year. The compound interest is

I
A. Rs. 5035
NO A D
CO N
B. Rs. 5051
A
C. Rs. 5072

PY
DO U A

D. Rs. 5150
T
ED PR

Answer:
Sum, P = 25000
C
©

Interest rate for 1st year, p = 5%

Interest rate for 2nd year, q = 6%
Interest rate for 3rd year, r = 8%
Time, n = 3 years
Now,
Amount (A) = P × (1 + p/100) × (1 + q/100) × (1 + r/100)
= 25000 × (1 + 5/100) × (1 + 6/100) × (1 + 8/100)
= 25000 × (1 + 1/20) × (1 + 3/50) × (1 + 2/25)
= 25000 × 21/20 × 53/50 × 27/25
= 250 × 21/2 × 53/5 × 27/25
= 10 × 21/2 × 53/5 × 27
= 1 × 21 × 53 × 27
= 30051
∴ Compound interest = Rs. (30051 – 25000) [∵CI = A – P]
= Rs.50051

Q. 6 The compound interest on Rs. 6250 at 8% per annum for 1 year,

T IO S
compounded half yearly, is

I
NO A D
A. Rs. 500

CO N
A
B. Rs. 510

PY
DO U A
C. Rs. 550
T
ED PR

D. Rs. 512.50
Answer:
C

Initial value, P = Rs.6250

©

Interest rate, R = 8% per annum

Time, n = 1 years
∵ Compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 6250 [1 +(8/2) /100]2
⇒ A = 6250 [1 + 4/100]2
⇒ A = 6250 [1 + 1/25]2
⇒ A = 6250 [26/25]2
⇒ A = 6250 × 26/25 × 26/25
⇒ A = 6250 × 26/25 × 26/25
⇒ A = 250 × 26 × 26/25
⇒ A = 10 × 26 × 26
⇒ A = 6760

T IO S
∴ Amount = Rs.6760

I
∴ Compound interest = Rs. (6760 – 6250) [∵CI = A – P]
NO A D
CO N
= Rs.510
A

PY
DO U A

Q. 7 The compound interest on Rs. 40000 at 6% per annum for 6

T
ED PR

months, compounded quarterly, is

A. Rs. 1209
C

B. Rs. 1902
©

C. Rs. 1200
D. Rs. 1306
Answer:
Present value, P = Rs.40000
Interest rate, R = 6% per annum
Time, n =6 months = 1/2 years
∵ Compounded quarterly.
∴ Amount (A) = P [1 + (R/4)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 40000 [1 +(6/4) /100]2 [4n = 4 × 1/2]
⇒ A = 40000 [1 + 3/200]2
⇒ A = 40000 [1 + 3/200]2
⇒ A = 40000 [203/200]2
⇒ A = 40000 × 203/200 × 203/200

T IO S
⇒ A = 40000 × 203/200 × 203/200

I
⇒ A = 200 × 203 × 203/200
NO A D
CO N
⇒ A = 1 × 203 × 203
A
⇒ A = 41209

PY
DO U A

∴ Amount = Rs.41209
T
ED PR

∴ Compound interest = Rs. (41209 – 40000) [∵CI = A – P]

= Rs.1209
C
©

Q. 8 The present population of a town is 24000. If it increases at the rate

of 5% per annum, what will be its population after 2 years?
A. 26400
B. 26460
C. 24460
D. 26640
Answer:
Population of a town, P = 24000
Time, n = 2 years
Increasing rate, R = 5% per annum
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Population = P (1 + R/100) n

T IO S
= 24000 (1 + 5/100)2

I
NO A D
= 24000 (1 + 1/20)2

CO N
A
= 24000 (21/20)2

PY
DO U A
= 24000 × 21/20 × 21/20
T
ED PR

= 240 × 21/2 × 21/2

= 60 × 21 × 21
C

= 26460
©

∴ Population of a town is 26460 after 2 years.

Q. 9 The value of a machine depreciates at the rate of 10% per annum. It

was purchased 3 years ago for Rs. 60000. What is the present value of
the machine?
A. Rs. 53640
B. Rs. 51680
C. Rs. 43740
D. Rs. 43470
Answer:
Value of a machine 3 years ago, P = Rs.60000
Time, n = 3 years
Rate of depreciates, R = 10% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value

T IO S
R = Annual interest rate

I
NO A D
n = Time in years]

CO N
A
∴ Value = P (1 - R/100) n [∵ Rate decreases]

PY
DO U A
= 60000 (1 - 10/100)3
T
= 60000 (1 - 1/10)3
ED PR

= 60000 (9/10)3
C

= 60000 × 9/10 × 9/10 × 9/10

©

= 60 × 9 × 9 × 9
= 43740
∴ Present value of the machine is Rs.43740.

Q. 10 The value of a machine depreciates at the rate of 20% per annum.

It was purchased 2 years ago. If its present value is Rs. 40000 for how
much was it purchased?
A. Rs. 56000
B. Rs. 62500
C. Rs. 65200
D. Rs. 56500
Answer:
Let value of a machine 2 years ago, = P
Present value of machine = Rs.40000
Time, n = 2 years
Rate of depreciates, R = 20% per annum
Now,

T IO S I
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
NO A D
interest

CO N
A
P = Present value

PY
DO U A
R = Annual interest rate
T
ED PR

n = Time in years]
∴ Value = P (1 - R/100) n [∵ Rate decreases]
C

⇒ 40000 = P (1 - 20/100)2
©

⇒ 40000 = P (1 - 1/5)2
⇒ 40000 = P (4/5)2
⇒ 40000 = P × 16/25
⇒ P = 40000 × 25/16
⇒ P = 2500 × 25
⇒ P = 62500
∴ Value of a machine 2 years ago is Rs.62500.

Q. 11 The annual rate of growth in population of a town is 10%. If its

present population is 33275, what was it 3 years ago?
A. Rs. 25000
B. Rs. 27500
C. Rs. 30000
D. Rs. 26000
Answer:
Let 3 years ago population = P
Present population = 33275

T IO S I
Time, n = 3 years
NO A D
CO N
Increases rate, R = 10% per annum
A
Now,

PY
DO U A
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
T
ED PR

interest
P = Present value
C

R = Annual interest rate

©

n = Time in years]
∴ Population = P (1 + R/100) n
⇒ 33275 = P (1 + 10/100)3
⇒ 33275 = P (1 + 1/10)3
⇒ 33275 = P (11/10)3
⇒ 33275 = P × 1331/1000
⇒ P = 33275 × 1000/1331
⇒ P = 25 × 1000
⇒ P = 25000
∴ 3 years ago population is 25000.

Q. 12 If the simple interest on a sum of money at 5% per annum for 3

years is Rs. 1200 then the compound interest on the same sum for the
same period at the same rate will be
A. Rs. 1225
B. Rs. 1236

T IO S
C. Rs. 1248

I
NO A D
D. Rs. 1261

CO N
A
Answer:

PY
Interest rate, R = 5% per annum
DO U A
T
Time = 3 years
ED PR

Simple interest = Rs.1200

C

Simple interest = PRT/100

©

⇒ 1200 = (P × 5 × 3)/100
⇒ 1200 = P × 15/100
⇒ P = 1200 × 100/15
⇒ P = 8000
Now,
Amount (A) = P (1 + R/100) n
= 8000 (1 + 5/100)3
= 8000 (1 + 1/20)3
= 8000 (21/20)3
= 8000 × 9261/8000
= 9261
∴ Amount = 9261
∴ Compound interest = Rs. (9261 – 8000) [∵CI = A – P]
= Rs.1261

1
Q. 13 If the compound interest on a sum for 2 years at 12 % per annum
2

T IO S
is Rs. 510, the simple interest on the same sum at the same rate for the
same period of time is

I
NO A D
A. Rs. 400

CO N
A
B. Rs. 450

PY
DO U A
C. Rs. 460
T
ED PR

D. Rs. 480
Answer:
C

Compound interest, CI = Rs.510

©

1
Interest rate, R = 12 % = 25/2% per annum
2

Time = 2 years
CI = P (1 + R/100) n – P
⇒ 510 = P (1 + (25/2)/100)2 – P
⇒ 510 = P (1 + 1/8)2 – P
⇒ 510 = P (9/8)2 – P
⇒ 510 = 81P/64 – P
⇒ 510 = (81P – 64P)/64
⇒ 510 = 17P/64
⇒ P = 510 × 64/17
⇒ P = 30 × 64
⇒ P = 1920
Now,
SI = PRT/100
= (1920 × 25/2 × 2)/100

T IO S
= (1920 × 25)/100

I
= 480
NO A D
CO N
∴ Simple interest = Rs.480
A

PY
DO U A

Q. 14 The sum that amounts to Rs.4913 in 3 years at (25/4) % per

T
ED PR

annum compounded annually, is

A. Rs. 3096
C

B. Rs. 4076
©

C. Rs. 4085
D. Rs. 4096
Answer:
Amount, A = Rs.4913
Interest rate, R = (25/4) % per annum
Time = 3 years
Amount (A) = P (1 + R/100) n
⇒ 4913 = P (1 + (25/4)/100)3
⇒ 4913 = P (1 + 1/16)3
⇒ 4913 = P (17/16)3
⇒ 4913 = P × 4913/4096
⇒ P = 4913 × 4096/4913
⇒ P = 4096
∴ Sum = Rs.4096

T IO S
Q. 15 At what rate per cent per annum will a sum of Rs. 7500 amount to
Rs. 8427 in 2 years, compounded annually?

I
A. 4%NO A D
CO N
A
B. 5%

PY
DO U A
C. 6%
T
ED PR

D. 8%
Answer:
C

Present value, P = Rs.7500

©

Amount, A = Rs.8427
Time, n = 2 years
Now,
Amount (A) = P (1 + R/100) n
⇒ 8427 = 7500 (1 + R/100)2
⇒ (1 + R/100)2 = 8427/7500
⇒ (1 + R/100)2 = (53/50)2
⇒ (1 + R/100) = (53/50)
⇒ R/100 = 53/50 – 1
⇒ R/100 = (53 – 50)/50
⇒ R = 3/50 × 100
⇒R=6
∴ Rate = 6%

T IO S I
NO A D
CO N
A

PY
DO U A
T
ED PR
C
©
 CCE Test Paper-11

Q. 1 Find the amount and the compound interest on Rs. 3000 for 2 years
at 10% per annum.
Answer:
Present value = Rs.3000
Interest rate = 10% per annum

T IO S
Time = 2 years

I
NO A D
Amount (A) = P (1 + R/100) n [Where, P = Present value

CO N
A
R = Annual interest rate

PY
DO U A
n = Time in years]
T
ED PR

∴ A = 3000 (1 + 10/100)2
⇒ A = 3000 (1 + 1/10)2
C

⇒ A = 3000 (11/10)2
©

⇒ A = 3000 × 11/10 × 11/10

⇒ A = 3000 × 121/100
⇒ A = 30 × 121
⇒ A = 3630
∴ Amount = Rs.3630
∴ Compound interest = Rs. (3630 – 3000)
= Rs.630
Q. 2 Find the amount of Rs. 10000 after 2 years compounded annually;
the rate of interest being 10% per anum during the first year and 12%
per annum during the second year. Also, find the compound interest.
Answer:
Present value = Rs.10000
Interest rate for 1st year, p = 10 % per annum
Interest rate for 2nd year, q = 12 % per annum

T IO S
Time = 2 years

I
NO A D
Amount (A) = P × (1 + p/100) × (1 + q/100)

CO N
A
A = 10000 × (1 + 10/100) × (1 + 12/100)

PY
= 10000 × (1 + 1/10) × (112/100)
DO U A
T
= 10000 × 11/10 × 112/100
ED PR

= 10 × 11 × 112
C

= 12320
©

∴ Amount = Rs.12320
∴ Compound interest = Rs. (12320 – 10000)
= Rs.2320

Q. 3 Find the amount and the compound interest on Rs. 6000 for 1 year
at 10% per annum compounded half-yearly.
Answer:
Present value = Rs.6000
Interest rate = 10 % per annum
Time = 1 years
∵ Interest is compounded half-yearly.
∴ Amount (A) = P [1 + (R/2)/100]2n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 6000 [1 + (10/2)/100]2
⇒ A = 6000 [1 + 5/100]2
⇒ A = 6000 [1 + 1/20]2

T IO S I
⇒ A = 6000 [21/20]2
NO A D
CO N
⇒ A = 6000 × 21/20 × 21/20
A
⇒ A = 300 × 21 × 21/20

PY
DO U A

⇒ A = 15 × 21 × 21
T
ED PR

⇒ A = 6615
∴ Amount = Rs.6615
C
©

∴ Compound interest = Rs. (6615 – 6000)

= Rs.615

Q. 4 A sum amounts to Rs. 23762 in 2 years at 9% per annum,

compounded annually. Find the sum.
Answer:
Let sum = P
Amount (A) = Rs.23762
Interest rate = 9 % per annum
Time = 2 years
Now,
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = P (1 + 9/100)2
⇒ 23762 = P (109/100)2
⇒ 23762 = P × 11881/10000

T IO S I
⇒ P = 23762 × 10000/11881
NO A D
CO N
⇒ P = 2 × 10000
A
⇒ P = 20000

PY
DO U A

∴ Sum = Rs.20000
T
ED PR

Q. 5 A scooter is bought for Rs. 32000. Its value depreciates at 10% per
C

annum. What will be its value after 2 years?

©

Answer:
Present value, P = Rs.32000
Time, n = 2 years
Rate of depreciates, R = 10% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Value = P (1 - R/100) n [∵ Rate decreases]
= 32000 (1 - 10/100)2
= 32000 (1 - 1/10)2
= 32000 (9/10)2
= 32000 × 9/10 × 9/10
= 320 × 9 × 9
= 25920

T IO S I
∴ Value of scooter will be Rs.25920 after 2 years.
NO A D
CO N
A
Q. 6 The compound interest on Rs. 5000 at 10% per annum for 2 years is

PY
DO U A
A. Rs. 550
T
ED PR

B. Rs. 1050
C. Rs. 950
C
©

D. Rs. 825
Answer:
Present value = Rs.5000
Interest rate = 10% per annum
Time = 2 years
Amount (A) = P (1 + R/100) n [Where, P = Present value
R = Annual interest rate
n = Time in years]
∴ A = 5000 (1 + 10/100)2
⇒ A = 5000 (1 + 1/10)2
⇒ A = 5000 (11/10)2
⇒ A = 5000 × 11/10 × 11/10
⇒ A = 5000 × 121/100
⇒ A = 50 × 121
⇒ A = 6050
∴ Amount = Rs.6050
∴ Compound interest = Rs. (6050 – 5000)

T IO S I
= Rs.1050
NO A D
CO N
A
Q. 7 The annual rate of growth in population of a town is 5%. If its

PY
DO U A
present population is 4000, what will be its population after 2 years?
T
ED PR

A. Rs. 4441
B. Rs. 4400
C

C. Rs. 4410
©

D. Rs. 4800
Answer:
Population of a town, P = 4000
Time, n = 2 years
Increasing rate, R = 5% per annum
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Population = P (1 + R/100) n
= 4000 (1 + 5/100)2
= 4000 (1 + 1/20)2
= 4000 (21/20)2
= 4000 × 21/20 × 21/20
= 200 × 21 × 21/20

T IO S I
= 10 × 21 × 21
NO A D
CO N
= 4410
A
∴ Population of a town after 2 years is 4410.

PY
DO U A
T
ED PR

Q. 8 At what rate per cent per annum will 5000 amount to Rs. 5832 in 2
years, compounded annually?
C

A. 11%
©

B. 10%
C. 9%
D. 8%
Answer:
Present value, P = Rs.5000
Amount, A = Rs.5832
Time, n = 2 years
Now,
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
interest
P = Present value
R = Annual interest rate
n = Time in years]
∴ Amount (A) = P (1 + R/100) n
⇒ 5832 = 5000 (1 + R/100)2
⇒ (1 + R/100)2 = 5832/5000
⇒ (1 + R/100)2 = 2916/2500

T IO S I
⇒ (1 + R/100)2 = (54/50)2
NO A D
CO N
⇒ 1 + R/100 = 54/50
A
⇒ R/100 = (54/50) - 1

PY
DO U A

⇒ R/100 = (54 – 50)/50

T
ED PR

⇒ R/100 = 4/50
⇒ R = 400/50
C
©

⇒R=8
∴ Rate = 8 %.

Q. 9 If the simple interest on a sum of money at 10% per annum for 3

years is Rs. 1500, then the compound interest on the same sum at the
same rate for the same period is
A. Rs. 1655
B. Rs. 1155
C. Rs. 1555
D. Rs. 1855
Answer:
Simple interest = Rs.1500
Interest rate = 10% per annum
Time = 3 years
Simple interest (SI) = PRT/100 [where, P = Present value
R = Interest rate
∴ 1500 = (P × 10 × 3)/100 T = Time]
⇒ 1500 = P × 30/100

T IO S I
⇒ 1500 = P × 3/10
NO A D
CO N
⇒ P = 1500 × 10/3
A
⇒ P = 500 × 10

PY
DO U A

⇒ P = 5000
T
ED PR

∴ Sum = Rs.5000
Now,
C
©

Amount (A) = P (1 + R/100) n [Where, P = Present value

R = Annual interest rate
n = Time in years]
∴ A = 5000 [1 + 10/100]3
⇒ A = 5000 [1 + 1/10]3
⇒ A = 5000 [11/10]3
⇒ A = 5000 × 11/10 × 11/10 × 11/10
⇒ A = 5000 × 1331/1000
⇒ A = 5 × 1331
⇒ A = 6655
∴ Amount = Rs.6655
∴ Compound interest = Rs. (6655 – 5000)
= Rs.1655

Q. 10 If the compound interest on a certain sum for 2 years at 10% per

annum is Rs. 1050, the sum is
A. Rs. 3000

T IO S
B. Rs. 4000

I
NO A D
C. Rs. 5000

CO N
A
D. Rs. 6000

PY
DO U A
Answer:
T
ED PR

Compound interest, CI = Rs.1050

Interest rate, R = 10% per annum
C

Time = 2 years
©

∴ CI = P (1 + R/100) n – P
⇒ 1050 = P (1 + 10/100)2 – P
⇒ 1050 = P (1 + 1/10)2 – P
⇒ 1050 = P (11/10)2 – P
⇒ 1050 = 121P/100 – P
⇒ 1050 = (121P – 100P)/100
⇒ 1050 = 21P/100
⇒ P = 1050 × 100/21
⇒ P = 50 × 100
⇒ P = 5000
∴ Sum = Rs.5000

Q. 11 Fill in the blanks:

…… 𝑛
(i) A = 𝑃 (1 + )
100

(ii) (Amount) - (Principal) = ……….

T IO S
(iii) If the value of a machine is Rs. P and it depreciates at R% per

I
annum, then its value after 2 years is
NO A D
CO N
(iv) If the population P of a town increases at R% per annum, then its
A
population after 5 years is ……….

PY
DO U A
Answer:
T
ED PR

(i) R
Amount (A) = P (1 + R/100) n [Where, A = Amount with compound
C

interest
©

P = Present value
R = Annual interest rate
n = Time in years]
(ii) Compound interest
Amount (A) = P (1 + R/100) n
And Compound interest = P (1 + R/100) n - P
𝑅 2
(iii) Rs. 𝑝 (1 − )
100

∵ Rate decreases.
∴ Value = P (1 - R/100) n
Present value of machine = Rs. P
Interest rate = R% per annum
Time, n = 2
𝑅 2
∴ Value = Rs. 𝑝 (1 − )
100

𝑅 5
(iv) 𝑃 (1 + )
100

T IO S
Present population of a town = P

I
Increases rate = R% per annum
NO A D
CO N
Time, n = 5 years
A
∴ Population = P (1 + R/100) n [Where,

PY
DO U A
P = Present value
T
ED PR

R = Annual interest rate

n = Time in years]
C

5
©

𝑅
∴ Population after 5 years = 𝑝 (1 + )
100