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Person A invested Rs 6000 in a bank at a simple interest rate of 5% per annum. Person B invested Rs 5000 at an 8% annual compound interest rate. What is the difference between the interest earned by B and A after 2 years?

Compound Interest MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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PPSCFPSCNTSPakistan govt jobs
Subject
Compound Interestmathematics-mcqs › compound-interest
Published
22 Sept 2019
Last updated
28 May 2026

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Explanation

The simple interest earned by A is calculated as: SI = 6000 × 5/100 × 2 = Rs 600. The compound interest earned by B is: CI = 5000 × (1 + 8/100)^2 - 5000 = 5000 × (1.08)^2 - 5000 = 5000 × 1.1664 - 5000 = Rs 832. The difference between B's compound interest and A's simple interest is Rs 832 - Rs 600 = Rs 232.

More Compound Interest MCQs

Practice related questions from the same subject.

  1. 1.Hafeez invested Rs. 15,000 at an annual interest rate of 10%, compounded semi-annually. What will be the total amount he receives after one year?
  2. 2.A person deposits Rs. 200 at the end of each year and lends it at a compound interest rate of 5%. What will be the total amount after 3 years?
  3. 3.Calculate the compound interest earned on Rs. 25,000 invested for 3 years at an annual interest rate of 12%.
  4. 4.Shohaib placed Rs. 8000 in a fixed deposit scheme for 2 years with an annual compound interest rate of 5%. What will be the total amount received by Shohaib at the end of the tenure?
  5. 5.Afnan borrows Rs.6000 at a simple interest rate of 6% per annum and then invests the same amount at compound interest at the identical rate for two years. What is his net gain from this transaction?
  6. 6.Rayan invested money at two simple interest rates: 6% per annum and 7% per annum. If the interest earned from both investments is the same, what is the ratio of the amounts invested at these two rates?
  7. 7.If Rs.12,000 earns Rs.7,200 as simple interest over five years at a certain rate, what is the compound interest on the same principal and period at that rate?
  8. 8.What is the difference in compound interest earned on Rs. 12,000 at an annual rate of 20% when compounded annually versus semi-annually for one year?
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