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CAT Exam  >  CAT Test  >  Level-wise Tests  >  Test Level 2: Simple & Compound Interest - 1 - CAT MCQ

Test Level 2: Simple & Compound Interest - 1 CAT MCQs solutions - Free


MCQ Practice Test & Solutions: Test Level 2: Simple & Compound Interest - 1 (10 Questions)

You can prepare effectively for CAT Level-wise Tests for CAT with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test Level 2: Simple & Compound Interest - 1". These 10 questions have been designed by the experts with the latest curriculum of CAT 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 20 minutes
  • - Number of Questions: 10

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Test Level 2: Simple & Compound Interest - 1 - Question 1
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A borrowed Rs. 20,000 from B, at 10% p.a. compound interest. After 1 year, again A borrowed Rs. 10,000 from B at the same rate. Exactly after 1 more year, A won a lottery and wanted to repay the debt. How much would he have to pay to B?

Detailed Solution: Question 1

Total money pay by A to B(after end of the 2 year) = 20,000 + 10,000 (1 + 10/100) = 24,200 + 11,000 = Rs. 35,200

Test Level 2: Simple & Compound Interest - 1 - Question 2
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A father left a will that his capital of Rs. 18,750 should be divided between his two sons aged 12 years and 14 years, respectively, when they attain maturity at the age of 18 years. The amount received by each at 5% simple interest would be the same. Find the sum allotted to the elder son.

Detailed Solution: Question 2

 Let the amount be Rs. x and Rs. y for the younger and elder son, respectively.
x + y = Rs. 18,750 ... (I)
Applying simple interest :
 x (1 + 6 × 5/100) = y (1 + 4 × 5/100) [ We know: S.I = (P×R×T)/100]
 x/12 = y/13 = 750
 x = Rs. 9,000
y = Rs. 9,750
Hence, amount allotted to elder son = Rs. 9,750

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Test Level 2: Simple & Compound Interest - 1 - Question 3
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A sum becomes 8 times its original amount in 3 years, compounded annually at a certain rate. Find the rate of interest.

Detailed Solution: Question 3

Let principle be P, amount be 8P and time(t) be 3 years compounded annually.


r = 100%

Test Level 2: Simple & Compound Interest - 1 - Question 4
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A sum of money becomes 6 times at 6.25% rate of simple interest. Find the rate at which it becomes 11 times.

Detailed Solution: Question 4

At 6.25%, money becomes 6 times. i.e; SI = 6 - 1 = 5 times.
SI and rate have inverse relation.
So, (11 - 1)/r = (6 - 1)/6.25;
r = {10 x (6.25/5)}%
= 12.5%

Test Level 2: Simple & Compound Interest - 1 - Question 5
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Certain sum gets doubled in 2 years at compound interest. What is the minimum number of years required in which the sum should become at least 7 times?

Detailed Solution: Question 5

Let principal = P, rate = r and time = n

⇒ 2n/2 ≥ 7
If n = 5, 25/2 < 7
If n = 6, 23 > 7
So, minimum 6 years are required.

Test Level 2: Simple & Compound Interest - 1 - Question 6
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Anjali is saving Rs. 1000 every month in a bank, where they pay 10% simple interest. How much amount will she get after 1 year?

Detailed Solution: Question 6

Simple interest after 1 month = (1000 × 10 × 1)/(100 × 12)
Simple interest after 2 months = (1000 × 10 × 2)/(100 × 12)
Simple interest after 3 months = (1000 × 10 × 3)/(100 × 12)
Similarly, simple interest after 12 months = (1000 × 10 × 12)/(100 × 12)
Required amount = 1000 × 12 + 1000 × 
= Rs. 12650

Test Level 2: Simple & Compound Interest - 1 - Question 7
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 borrowed Rs. 5000 at a rate r1 simple interest. B borrowed Rs. 6000 at a rate r2 simple interest. After 5 years, both the amounts were exactly equal, what is r1/r2?

Detailed Solution: Question 7

5000 
5 + 25 r1/100 = 6 + 30r2/100
So, we cannot find r1/r2 from this.

Test Level 2: Simple & Compound Interest - 1 - Question 8
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On a sum of Rs. 1000, the compound interest for 2 years is twice the simple interest for 2 years at 11%. Find the rate at which the interest is compounded annually.

Detailed Solution: Question 8

SI at 11% for 2 years on a sum of Rs. 1000 = Rs. 220.
Let the rate at which the interest is compounded annually be R.
Since CI is twice the SI,

⇒ R = 20%
Required rate = 20%

Test Level 2: Simple & Compound Interest - 1 - Question 9
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Richa borrowed a certain amount from Priya at a rate of 10% compounded annually. She paid Rs. 11,000 at the end of the 1st year and Rs. 60,500 at the end of the second year and cleared the loan. What was the amount borrowed by Richa from Priya?

Detailed Solution: Question 9

Amount = Principal
The present value of Rs. 11,000, which is paid after 1 year, is 
The present value of Rs. 60,500, which is paid after 2 years, is 
So, borrowed amount = 10,000 + 50,000 = Rs. 60,000

Test Level 2: Simple & Compound Interest - 1 - Question 10
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If the difference between compound interest and simple interest on a certain amount at 7% per annum for two years is Rs. 7.35, then find the principal amount.

Detailed Solution: Question 10

CI - SI = P  (For 2 years)
7.35 = P 
Or, P = = Rs. 1500

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About this CAT Practice Test

This test contains 10 MCQs on Test Level 2: Simple & Compound Interest - 1 with detailed solutions for each question. It is part of the Level-wise Tests for CAT course on EduRev, designed to align with the current CAT syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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