The CAT QA section requires speed and accuracy, along with a thorough understanding of the Compound Interest. This article provides a set of MCQs on Compound Interest to help you understand the topic and improve your problem-solving skills with the help of detailed solutions by ensuring conceptual clarity, which will help you in the CAT 2025 exam preparation

Whether you're revising the basics or testing your knowledge, these MCQs will serve as a valuable practice resource.

The CAT 2025 exam is expected to follow a similar trend to the CAT 2024, with 22 questions from the QA section out of a total of 68 questions.

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CAT MCQs on Compound Interest

1. For the same principal amount, the compound interest for two years at 5% per annum exceeds the simple interest for three years at 3% per annum by Rs 1125. Then the principal amount in rupees is ?
[This Question was asked as TITA]
A

Rs. 60000

B

Rs. 70000

C

Rs. 100000

D

Rs. 90000

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2. A person invested a total amount of Rs 15 lakh. A part of it was invested in a fixed deposit earning 6% annual interest, and the remaining amount was invested in two other deposits in the ratio 2 : 1, earning annual interest at the rates of 4% and 3%, respectively. If the total annual interest income is Rs 76000 then the amount (in Rs lakh) invested in the fixed deposit was
A
7
B
9
C
8
D
6

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3. A man invests Rs. 10,000 at 5% per annum compound interest for 3 years. What is the amount he receives at the end of 3 years?
A
Rs. 11,576.25
B
Rs. 11,500
C
Rs. 12,000
D
Rs. 12,100

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4. A sum of money doubles in 4 years at a certain rate of compound interest. In how many years will it become 8 times? 

 

A
8 years
B
10 years
C
12 years
D
16 years

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5. Ram purchased a flat at Rs. 1 lakh and Prem purchased a plot of land worth Rs. 1.1 lakh. The respective annual rates at which the prices of the flat and the plot increased were 10% and 5%. After two years they exchanged their belongings and one paid the other the difference. Then:
A
Ram paid Rs. 275 to Prem
B
Ram paid Rs. 475 to Prem
C
Ram paid Rs. 375 to Prem
D
Prem paid Rs. 475 to Ram

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6. The rate of inflation was 1000%. Then what will be the cost of an article, which costs 6 units of currency now, 2 years from now?
A
666
B
660
C
720
D
726

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7. A sum of money compounded annually becomes Rs.625 in two years and Rs.675 in three years. The rate of interest per annum is:
A
7%
B
8%
C
6%
D
5%

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