Compound Interest Practice Test Set 1

Since the rate changes every year, multiply the principal by each year's factor: 1.05, 1.06 and 1.08.

Amount = 75,000 $\times 1.05 \times 1.06 \times 1.08 =$ ₹90,153 .

The investment runs from age 20 to age 24, so the time is 4 years.

$Amount = 60,000 \times (1 + 15/100)⁴ = 60,000 \times 1.15⁴.$

Convert 2.5 years into months: 2.5 $\times 12 = 30 months$. At 10-monthly compounding, there are 30/10 = 3 periods.

Rate for each 10-month period = 12% $\times 10/12 = 10%$.

Convert 2.5 years into 30 months. With compounding every 10 months, there are 3 periods.

Rate per 10-month period = 15% $\times 10/12 = 12.5%$. Growth factor = 1.125 = 9/8.

Amount = 4,096 $\times (9/8)³ = 4,096 \times 729/512 =$ ₹5,832 .

There are 2 complete years and a remaining period of 5/8 year. Calculate compound growth for the 2 complete years first.

Amount after 2 years = 12,000 $\times 1.08² = 12,000 \times 1.1664 =$ ₹13,996.80 .

For the remaining 5/8 year, use simple interest for the fractional period: 8% $\times 5/8 = 5%$. Amount = 13,996.80 $\times 1.05 =$ ₹14,696.64 .