Basic Numeracy (Class X Level) – Simple and compound interest

Assam Public Service Commission (APSC)

Combined Competitive Examination (CCE)

Preliminary Examination – General Studies Paper II (Objective Type, 200 Marks)

Topic: Basic Numeracy (Class X Level)

Sub-Topic: Simple and Compound Interest

These questions test your understanding of Simple Interest (SI), Compound Interest (CI), principal, rate, time, amount, and comparison between SI and CI. Choose the correct answer.

Simple and Compound Interest – MCQs

MCQ 1

Simple Interest (SI) is calculated using the formula:
A. ( \dfrac{PR}{T} )
B. ( \dfrac{PRT}{100} )
C. ( \dfrac{PT}{R} )
D. ( \dfrac{R}{PT} )

Correct Answer: B
Explanation:
[
\text{SI} = \dfrac{P \times R \times T}{100}
]

MCQ 2

If ₹1,000 is invested at 10% per annum for 2 years, the simple interest is:
A. ₹100
B. ₹150
C. ₹200
D. ₹250

Correct Answer: C
Explanation:
[
\text{SI} = \dfrac{1000 \times 10 \times 2}{100} = ₹200
]

MCQ 3

The amount (A) in simple interest is given by:
A. A = P − SI
B. A = SI × P
C. A = P + SI
D. A = P × R

Correct Answer: C
Explanation:
Amount = Principal + Simple Interest.

MCQ 4

If the SI on a sum for 4 years at 5% per annum is ₹400, the principal is:
A. ₹1,600
B. ₹2,000
C. ₹2,400
D. ₹3,200

Correct Answer: B
Explanation:
[
P = \dfrac{SI \times 100}{R \times T} = \dfrac{400 \times 100}{5 \times 4} = ₹2000
]

MCQ 5

Which of the following increases every year in compound interest?
A. Rate
B. Time
C. Principal
D. Interest earned

Correct Answer: D
Explanation:
In CI, interest is calculated on principal + previous interest, so interest increases each year.

MCQ 6

Compound Interest is calculated on:
A. Original principal only
B. Principal plus accumulated interest
C. Interest only
D. Rate and time

Correct Answer: B
Explanation:
CI considers interest on interest.

MCQ 7

The compound amount formula is:
A. ( A = P(1 + RT) )
B. ( A = P(1 + \frac{R}{100})^T )
C. ( A = \frac{PRT}{100} )
D. ( A = P + RT )

Correct Answer: B
Explanation:
Standard CI formula.

MCQ 8

Find the compound amount of ₹1,000 at 10% p.a. for 1 year:
A. ₹1,050
B. ₹1,080
C. ₹1,100
D. ₹1,120

Correct Answer: C
Explanation:
[
A = 1000(1 + 0.10) = ₹1100
]

MCQ 9

For the same principal, rate, and time, which is greater?
A. Simple Interest
B. Compound Interest
C. Both equal
D. Depends on principal

Correct Answer: B
Explanation:
CI ≥ SI for time more than 1 year.

MCQ 10

If ₹2,000 is invested at 5% p.a. for 2 years (SI), the interest is:
A. ₹100
B. ₹150
C. ₹200
D. ₹250

Correct Answer: C
Explanation:
[
SI = \dfrac{2000 \times 5 \times 2}{100} = ₹200
]

MCQ 11

If the rate of interest is 0%, the interest earned will be:
A. Equal to principal
B. Double the principal
C. Zero
D. Negative

Correct Answer: C
Explanation:
No rate → no interest.

MCQ 12

The difference between CI and SI for 2 years is mainly due to:
A. Rate
B. Time
C. Interest on interest
D. Principal

Correct Answer: C
Explanation:
CI includes interest on accumulated interest.

MCQ 13

If SI on a sum for 3 years is ₹450 and rate is 5%, the principal is:
A. ₹2,500
B. ₹2,800
C. ₹3,000
D. ₹3,500

Correct Answer: C
Explanation:
[
P = \dfrac{450 \times 100}{5 \times 3} = ₹3000
]

MCQ 14

Compound interest is generally used in:
A. Daily expenses
B. Bank deposits and loans
C. Household budgeting
D. Shop discounts

Correct Answer: B
Explanation:
Banks use CI for long-term growth.

MCQ 15

If ₹1,000 amounts to ₹1,210 in 2 years (CI), the rate of interest is:
A. 8%
B. 9%
C. 10%
D. 11%

Correct Answer: C
Explanation:
[
1000(1 + \frac{R}{100})^2 = 1210 \Rightarrow R = 10%
]

MCQ 16

Simple interest depends on:
A. Principal only
B. Time only
C. Rate only
D. Principal, rate, and time

Correct Answer: D
Explanation:
All three factors are required.

MCQ 17

If CI is calculated yearly, the interest for the first year equals:
A. Zero
B. Half of total interest
C. SI for one year
D. CI for two years

Correct Answer: C
Explanation:
In the first year, CI = SI.

MCQ 18

Which interest grows faster over time?
A. Simple Interest
B. Compound Interest
C. Both same
D. Cannot be compared

Correct Answer: B
Explanation:
CI increases exponentially.

MCQ 19

If ₹5,000 is invested at 8% p.a. SI for 1 year, interest is:
A. ₹300
B. ₹350
C. ₹400
D. ₹450

Correct Answer: C
Explanation:
[
SI = \dfrac{5000 \times 8 \times 1}{100} = ₹400
]

MCQ 20

The amount in CI after 2 years is always:
A. Less than SI amount
B. Equal to SI amount
C. Greater than SI amount
D. Zero

Correct Answer: C
Explanation:
CI adds interest on interest.

MCQ 21

If the principal is doubled (rate and time same), SI becomes:
A. Half
B. Same
C. Double
D. Four times

Correct Answer: C
Explanation:
SI ∝ Principal.

MCQ 22

If the time period is zero, the interest earned is:
A. Equal to principal
B. Zero
C. Double
D. Negative

Correct Answer: B
Explanation:
No time → no interest.

MCQ 23

CI for one year at 10% on ₹1,000 is:
A. ₹90
B. ₹95
C. ₹100
D. ₹110

Correct Answer: C
Explanation:
For one year, CI = SI.

MCQ 24

Which is true?
A. SI always > CI
B. CI always < SI
C. SI = CI for 1 year
D. CI is independent of time

Correct Answer: C
Explanation:
Difference starts from second year.

MCQ 25

If SI = CI for a given sum, then the time is:
A. 1 year
B. 2 years
C. 3 years
D. 5 years

Correct Answer: A
Explanation:
Only in the first year both are equal.

MCQ 26

The rate of interest is expressed in:
A. Rupees
B. Years
C. Percentage
D. Ratio

Correct Answer: C
Explanation:
Rate is always in percent per annum.

MCQ 27

Which term represents the original sum invested?
A. Amount
B. Interest
C. Rate
D. Principal

Correct Answer: D
Explanation:
Principal is the initial sum.

MCQ 28

In CI, interest of the second year is calculated on:
A. Original principal
B. Only interest
C. Principal + first year interest
D. Rate × time

Correct Answer: C
Explanation:
CI includes accumulated interest.

MCQ 29

If ₹1,000 is invested at 10% p.a. SI for 3 years, the amount is:
A. ₹1,200
B. ₹1,250
C. ₹1,300
D. ₹1,350

Correct Answer: C
Explanation:
SI = 300 → Amount = 1000 + 300 = ₹1300.

MCQ 30

Simple and compound interest questions mainly test:
A. Memorization
B. Language ability
C. Logical numerical application
D. General awareness

Correct Answer: C
Explanation:
They assess conceptual clarity and calculation skills.

✅ APSC Exam Relevance

These MCQs comprehensively cover SI and CI formulas, applications, comparisons, and banking-related numeracy, fully aligned with APSC CCE GS Paper II – Basic Numeracy (Class X level).

• Simple interest MCQs for competitive exams

• Compound interest questions GS Paper II

• Basic numeracy interest problems Class X

• SI and CI formula based MCQs

• APSC CCE banking numeracy practice