Compound interest: the formula, conversion periods, growth and depreciation

PYQ (2016-2025 papers)

• 2025 · G4 · Question 141 · Final answer key
• 2024 · G4 · Question 126 · Final answer key
• 2024 · G4 · Question 195 · Final answer key
• 2022 · G4 · Question 121 · Final answer key
• 2022 · G4 · Question 132 · Final answer key
• 2016 · G4 · Question 137 · Final answer key
• 2016 · G4 · Question 149 · Final answer key
• 2016 · VAO · Question 171 · Final answer key

Free questions

1. Question 1

   What is the compound interest on ₹10000 at 8% compounded annually for the fractional period of 2¾ years?

   1. A. ₹2200
   2. B. ₹2363.84
   3. C. ₹12363.84
   4. D. ₹1664
   Answer and explanation

   ✓ Correct answer: B. ₹2363.84

   For a fractional period A = P(1 + r/100)ᵃ × (1 + (b/c) × r/100) = 10000 × (27/25)² × 53/50 = ₹12363.84; C.I = ₹2363.84.

   Source: கணக்கு, எட்டாம் வகுப்பு, தமிழ் வழி (Mathematics, Standard VIII, Tamil medium; Samacheer Kalvi) (இயல் 4 வாழ்வியல் கணிதம் (4.4 கூட்டுவட்டி), p. 142 (PDF p. 148))

2. Question 2

   Under compound interest, what happens to the interest earned in one period?

   1. A. It is subtracted from the principal
   2. B. It is worked out again on the first principal only
   3. C. It lowers the next year's rate of interest
   4. D. It is added to the principal, which becomes the principal for the next period
   Answer and explanation

   ✓ Correct answer: D. It is added to the principal, which becomes the principal for the next period

   In post offices and banks the interest of the first period is added to the principal, and that sum is the principal for the next period; this is compound interest.

   Source: கணக்கு, எட்டாம் வகுப்பு, தமிழ் வழி (Mathematics, Standard VIII, Tamil medium; Samacheer Kalvi) (இயல் 4 வாழ்வியல் கணிதம் (4.4 கூட்டுவட்டி), p. 139 (PDF p. 145))