Home/Aptitude Test/Quantitative Reasoning Simple and Compound Interest Online Test

Quantitative Reasoning Simple and Compound Interest Online Test

Mustansar KhanLast Updated: July 2, 2025

Quantitative Reasoning Aptitude Test

Simple and Compound Interest Test Online

Total Questions:	50
Time Allowed:	25 Minutes
Total Marks:	50
How to Attempt Test:	Please choose the right Option in MCQ-type question.
Test Helpful For:	Aptitude Test Quantitative Reasoning Decimal Fraction Test Mathematics Aptitude Questions Entrance Tests and Recruitment Test

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1. If you invest for 10 years, which method gives maximum returns?

Flat Rate Interest

Simple Interest

Quarterly Simple Interest

Monthly Compound Interest

2. Which interest model is easiest to manually calculate?

Compound Interest

Reducing Balance Interest

Continuous Compound Interest

Simple Interest

3. If time is doubled in simple interest formula, what happens to the interest?

Halves

Doubles

Triples

No change

4. In compound interest, if the rate is 0%, the interest becomes:

Negative

Equal to time

Zero

Maximum

5. Which one of the following can be negative?

Principal

None of these

Time

Interest

6. In Compound Interest, the term “compounded annually” means:

Interest is added to principal once every year

Interest is never added to principal

Interest is paid at the end of 2 years

Interest is added to principal every month

7. If the principal amount is constant, what increases the Simple Interest?

Both A and B

Decrease in rate

Decrease in time

Increase in time

8. For the same principal, rate, and time, the Compound Interest is:

Sometimes less, sometimes more

Always equal to Simple Interest

Always less than Simple Interest

Always greater than Simple Interest

9. Which of the following scenarios would benefit from compound interest over time?

One-time purchase

Long-term investment

Monthly grocery spending

Short-term loan

10. Which of the following is not true for Simple Interest?

SI is compounded annually

SI is constant per year

SI is easy to calculate

SI increases linearly

11. Which of the following statements is true about Compound Interest?

It includes interest on previously accumulated interest

It is always less than Simple Interest

It remains constant every year

It is only applicable on savings accounts

12. In the absence of compounding, Compound Interest becomes:

Zero

Less than Simple Interest

Greater than Simple Interest

Equal to Simple Interest

13. In compound interest, compounding done annually results in:

The lowest amount among compound options

The same as simple interest

Highest interest return

No interest at all

14. Which factor plays the least role in determining interest?

Time

Rate

Mode of repayment

Principal

15. Which formula is used for Compound Interest calculation?

CI = P × R / (1 + T)

CI = P × T / R

CI = P × (1 + R/100)^T – P

CI = P × R × T / 100

16. Why is the compound interest amount greater over a long period?

Due to decrease in time

Due to fixed principal

Due to increase in rate

Due to repeated compounding

17. What is the effect of higher interest rate on compound interest?

Interest becomes simple

Increase in total interest

No effect

Decrease in total interest

18. The interest which is calculated without taking into account previously earned interest is:

Compound Interest

Simple Interest

Net Interest

Gross Interest

19. In compound interest, interest calculated over previous interest is called:

Interest on interest

Principal

Bonus

Compound effect

20. What does the term "Simple Interest" refer to in financial calculations?

Interest calculated only on loans

Interest calculated on the initial principal only

Interest calculated on the principal and the accumulated interest

Interest deducted before investment

21. The amount obtained after adding interest to the principal is called:

Amount

Net Worth

Yield

Total value

22. If the interest is compounded half-yearly, the rate is:

Halved and time is doubled

Doubled and time is halved

Rate and time remain the same

Halved and time is doubled

23. The term “principal” in interest calculation means:

Original amount invested or borrowed

Total amount repaid

Total interest earned

Interest after time period

24. For a fixed rate and time, which principal earns the least interest?

₹500

₹1000

₹200

₹0

25. Which of the following gives equal values in the first year of investment?

Reducing Interest

Flat Rate Interest

Only Compound Interest

Simple and Compound Interest

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26. Which method is used by banks to calculate interest on savings?

Simple Interest

Compound Interest

Reducing Balance Method

Flat Interest

27. What is the impact of increasing the time period on simple interest?

Increases interest

No effect

Decreases interest

Makes interest variable

28. Which of the following directly increases both SI and CI?

Increasing rate

Decreasing time

Fixing interest type

Decreasing principal

29. The term "annually compounded" refers to:

Interest being added once every year

Simple interest applied twice

Doubling the interest rate

Ignoring the principal

30. Which type of interest gives returns on reinvested interest?

Flat Interest

Compound Interest

Simple Interest

Reducing Balance Interest

31. Which one is not a method of compounding?

Static

Yearly

Monthly

Daily

32. Why is Compound Interest considered more beneficial for investors?

Because it grows exponentially

Because it is lower

Because it reduces over time

Because it’s fixed

33. If interest is calculated using the formula

Compound Interest

No Interest

which type of interest is being used?

Flat Interest

Simple Interest

34. A fixed deposit earns which type of interest in most cases?

Decreasing Interest

Simple Interest

Compound Interest

No Interest

35. What is the relation between time and compound interest?

CI becomes SI over time

CI increases with time

CI decreases with time

CI remains constant over time

36. Which frequency yields the highest interest: annually, quarterly, or monthly?

Quarterly

Monthly

Annually

All equal

37. What happens to the Compound Interest if the compounding frequency increases?

It remains constant

It decreases

It increases

It becomes simple interest

38. For which of the following would a borrower prefer simple interest?

Fixed deposit

Short-term personal loan

Recurring deposit

Long-term home loan

39. If the compound interest on a sum for 2 years is equal to simple interest, then:

Rate is 100%

Interest rate is very low

Rate is 0%

Interest is compounded annually

40. Which factor does not affect the calculation of Simple Interest?

Rate of interest

Inflation rate

Time period

Principal amount

41. The longer the compounding period (monthly, daily), the:

Higher the effective return

Lower the effective return

Interest remains constant

Time required increases

42. What does "rate of interest" signify?

The period of investment

The percentage of principal paid as interest

The total amount received

The annual income

43. In compound interest, what does "T" stand for?

Term deposit

Taxation value

Total amount

Time in years

44. What is the formula for calculating Simple Interest?

(Principal + Rate + Time) / 3

(Principal × Rate) / Time

(Principal × Rate × Time) / 100

(Principal × Time) / Rate

45. What will be the compound interest if the principal is zero?

Equal to rate

Cannot be determined

Equal to time

Zero

46. Which interest is always higher if the time is more than one year?

Compound Interest

Simple Interest

It depends on principal

Both are equal

47. Which of the following results in the highest amount of compound interest?

Compounded annually

Compounded quarterly

Compounded semi-annually

Compounded monthly

48. In the context of loans, Simple Interest is preferred when:

Loan amount is large

Interest rates are high

Loan duration is long

Loan duration is short

49. Which of the following is not a component of the Simple Interest formula?

Principal

Time

Compounding frequency

Rate

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Mustansar KhanLast Updated: July 2, 2025

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Quantitative Reasoning Simple and Compound Interest Online Test

Quantitative Reasoning Aptitude Test

Simple and Compound Interest Test Online

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Quantitative Reasoning Aptitude Test

Simple and Compound Interest Test Online

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