Simple interest is a one-time charge based on the principal balance and loan term. Compound interest is an ongoing charge based on the principal balance, loan term, and additional interest that's accumulated from previous payment periods.  Here are some differences between simple and compound interest: How much interest is paid: Simple interest is paid at regular intervals, such as monthly or annually. Compound interest is paid on both the principal and the already accrued interest. How long interest is paid: Simple interest is a one-time charge. Compound interest is an ongoing... Show more

Simple interest is a one-time charge based on the principal balance and loan term. Compound interest is an ongoing charge based on the principal balance, loan term, and additional interest that's accumulated from previous payment periods. 

Here are some differences between simple and compound interest:
How much interest is paid: Simple interest is paid at regular intervals, such as monthly or annually. Compound interest is paid on both the principal and the already accrued interest.
How long interest is paid: Simple interest is a one-time charge. Compound interest is an ongoing charge. 

Here are some formulas for simple and compound interest:
Simple interest: I = (PRT)/100
Compound interest: A = P(1 + r/n)^nt 

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Arithmetic Practice Test: Simple & Compound Interest

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25 Questions

1. What sum shall fetch Rs. 120 as interest in 5 years given at a rate of 6% per annum

400425370350

2. A sum at simple interest becomes Rs. 5184 in 2 years but Rs. 5760 in 5 years. The rate % per annum is

85467

3. Rs. 5000/- invested partially at a rate of 4% per annum and at a rate of 6% per annum earned Rs. 472 after 2 years. The sum given at 6% is _____

26001800200024003200

4. Rs. 2500/- @5% shall earn the same interest in how many years what Rs. 5000/-earns @8% in 4 years.

5911.912.87.5

5. A sum of money put at compound interest becomes Rs. 672 in two years and Rs. 714 in three years. The rate of interest is_____

6 % p.a. % p.a.5 % p.a. % p.a.

6. A money shall become three times of itself given at 10% per annum in how many years?

20221815

7. Interest @ % for Rs. 750 for year is _____

85.3189.4275.3178.42

8. What sum will discharge a debit of Rs. 5300 due a year and a half hence at 4 % per annum simple interest?

5000650048006200

9. A sum of Rs. 2550 is to be paid back in two years in two equal annual payments, 4 p.c. compound interest being allowed. What is the annual payment?

13501296 15601352

10. Rs. 2000 @ 10% per annum after yrs shall earn an interest as much as 2800 earns at the rate of 10% after X years. Then X is

13

11. The S.I. on a certain sum for 14 months at 6% per annum is Rs. 25 more than the S.I. on the same sum for 8 % per annum The sum borrowed is_____

Rs. 1100Rs. 1344Rs. 1500Rs. 2500

12. Population of a village is 15,000. It increases @ 10% per year. At the end of 3rd year the population shall be

19000199651875019675

13. Rs. 100 shall become Rs. 110 in what time given at 8% per annum

1.251.51.751

14. Rs. 2500 lent at a rate of % per annum shall become Rs. 2720 after _____ years.

1.51.81.41.6

15. A sum of money @ 4% per annum after year compounded annually becomes Rs. 2545.92 The sum given is Rs _____

2200240024502500

16. Rs. 800/- given at what rate of interest shall earn Rs. 490 after yrs.

3.5546

17. The amount of Rs. 500 given for 2 years at 5% per annum C.I. will be Rs._____

205

18. Interest for year for Rs. 2400 is Rs. 189. The rate % is

4.534

19. Consider the following statements.
1.Money gets doubled in 5 years if the rate of interest is %
2.Money gets doubled in 5 years if the rate of interest is 20%
3.Money becomes four times in 10 years if it gets doubled in 5 years.
Of these statements:

2 alone is correct1 and 3 are correct3 alone is correct.2 and 3 are correct.

20. How much is total earned by way of interest on Rs. 1600 @ 8% per annum after 6 years including the interest on Rs. 2000 @ 4% p.a during this period.

14781418130014881518

21. In what time will a sum of money double itself at % per annum simple interest?

8 years5 years16 years12 years

22. Compound interest for Rs. 5000 @ 4% for 2 year is Rs. _____

400450408420

23. Rs. 540 put @ 6% per annum for yrs shall earn an interest of Rs. _____

40481045

24. Sum of Rs. 2000 shall fetch Rs. 552.55 @ 5% per annum in how many years given at the compound interest?

53.54.5.43

25. A sum was put at simple interest at a certain rate for 2 years. Had it been put at 1% higher rate, it would have fetched Rs. 24 more. The sum is

Rs. 600Rs. 800Rs. 480Rs. 1200