Simple Interest Compound Interest Questions

In almost every banking exam there are multiple questions asked from the topic simple interest and compound interest. This topic has always been an important concept asked in the banking examination and thus its understanding is very important in order to perform such questions in the upcoming RBI Assistant prelims exam. In this blog we will be discussing a few Simple Interest Compound Interest Free Practice Questions with Detailed Solutions. Understand the concept and practice these questions below:

Compound interest and Simple interest:

Compound interest:
Interest = Amount – Principal

If Rs. ‘P’ is invested at a rate of ‘r%’ p.a. compounded annually for ‘t’ years, then the amount received after ‘t’ years will be = P × {1 + (r/100)}^t

If the interest is not compounded annually, then

Effective rate of interest = Actual rate ÷ Number of times the interest is compounded in a year

Effective time period = Actual time period × Number of times the interest is compounded in a year

RBI Assistant Prelims 2023 Free Mock Test

Simple interest:

If Rs. ‘P’ is invested at simple interest of ‘r%’ p.a. for ‘t’ years, then the amount received after ‘t’ years will be = P + {(P × r × t)/100}

And, the simple interest received = {(P × r × t)/100}

Relationship between simple interest (SI) and compound interest (CI):

When a principal (P) is invested at the rate of ‘r%’ p.a., then

Difference between SI and CI after two years = P × (r/100)² 

Difference between SI and CI after three years = P × (r/100)² × {(r/100) + 3}

RBI Assistant Prelims 2023 Free Mock Test

This brings us to the end of the article. Make sure that you practice these simple and compound interest questions with detailed solutions and prepare well for the upcoming RBI Assistant exam.