Simple and compound interest questions with answers

These simple and compound interest questions cover the two-year difference type, the equal-instalment type and the plain rate-and-time type that banking papers set every session. Each walkthrough works compound interest as successive percentage multipliers, which is faster than the formula and much harder to misapply under time pressure.

How to use this set

The 15 questions below are ordered the way an exam block is rather than easiest-first: two gentle openers, then a run of medium, and a hard one every sixth question — 2 of the 15 sit in the hard band. Every question is a simple & compound interest.

Work each question on paper before you open its solution. The walkthrough is the method itself, step for step, so reading it first turns a practice set into a reading exercise and teaches nothing. If you are stuck on the method rather than on one question, the method guide is a better place to start than the next question: Interest: simple, compound and the difference.

15 simple and compound interest questions with answers

Every question below was generated by the same engine that mints the ComputePrep daily timed drill, and machine-checked before it reached this page — a multiple-choice question validates its own answer against its own options at generation, and ships only with a walkthrough attached. The walkthrough is the engine's own.

Where these questions come from

Most free practice for this topic is a scanned upload or a blog quiz, and neither can tell you a question has exactly one answer. That is the one thing this set can promise: it is minted, not typed. The engine behind it serves ComputePrep's daily timed drill, so the questions here are the same shape as the ones a live round would give you — and there is an unlimited supply of them, which is why this page can be regenerated rather than padded.

If you want the method rather than more questions, Interest: simple, compound and the difference covers the approach, the traps and a worked table. This page and that one deliberately answer different questions: that one is how do I solve these, this one is give me simple and compound interest questions with the answers.

FAQ

What is the shortcut for the two-year SI and CI difference?

The difference over two years equals principal times rate squared over ten thousand. For three years it is principal times rate squared times (300 + rate) over one million. The two-year version alone answers a large share of the interest questions on a bank paper.

How do I handle half-yearly compounding?

Halve the rate and double the number of periods, then apply the multiplier that many times. Ten per cent per annum compounded half-yearly is five per cent applied twice a year, which gives 10.25 per cent effective — and that quarter point is exactly what the distractor options are built around.

When is simple interest larger than compound interest?

Never after the first period, and equal during it. For any whole number of periods beyond one, compound exceeds simple, and the gap widens with both rate and time. An option showing compound below simple over two years can be eliminated without any calculation.

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