Compound Interest Practice Test Set 2

$A/P = 3$ in 3 years. Growth factor per year = $3^{1/3$} $\approx 1.4422$. Rate R = (1.4422 - 1) * 100% $\approx 44.2%$.

✓ Correct Answer: Option D.

Quarterly factor = (625/256)^{1/4} = 5/4. Quarterly rate = (5 - 4)/4 * 100% = 25%. Annual rate = 25% * 4 = 100%.

✓ Correct Answer: Option A.

Rate = 12.5% = 1/8. Ratio of Amount after 2nd year to 1st year = 9:8. Thus ratio of A1 : A2 = 8:9.

✓ Correct Answer: Option A.

Growth from 1 year to 2 years (2 half-years) = 65340 / 54000 = 1.21. Multiplicative factor for 1 half-year = sqrt(1.21) = 1.1. Half-yearly rate = 10%. Annual rate = 10% * 2 = 20%.

✓ Correct Answer: Option B.

Effective CI % = 3676.31 / 10000 = 36.7631%. For 3 half-years, (1 + r)^3 = 1.367631 => 1 + r = 1.11 => r = 11% half-yearly. Annual rate = 11% * 2 = 22%.

✓ Correct Answer: Option C.