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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. Why is Compound Interest considered more beneficial for investors?

Because it is lower

Because it’s fixed

Because it reduces over time

Because it grows exponentially

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

Reducing Interest

Simple and Compound Interest

Only Compound Interest

Flat Rate Interest

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

Zero

Equal to Simple Interest

Less than Simple Interest

Greater than Simple Interest

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

Compound Interest

Net Interest

Gross Interest

Simple Interest

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

Always equal to Simple Interest

Always greater than Simple Interest

Always less than Simple Interest

Sometimes less, sometimes more

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

Long-term investment

Short-term loan

One-time purchase

Monthly grocery spending

7. If interest is calculated using the formula

which type of interest is being used?

Compound Interest

No Interest

Flat Interest

Simple Interest

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

Fixed deposit

Long-term home loan

Short-term personal loan

Recurring deposit

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

Simple Interest

Compound Interest

Flat Interest

Reducing Balance Method

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

Bonus

Compound effect

Principal

Interest on interest

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

Decrease in rate

Decrease in time

Both A and B

Increase in time

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

Time

Rate

Mode of repayment

Principal

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

Interest rates are high

Loan duration is short

Loan amount is large

Loan duration is long

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

Rate is 0%

Rate is 100%

Interest rate is very low

Interest is compounded annually

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

It is always less than Simple Interest

It includes interest on previously accumulated interest

It is only applicable on savings accounts

It remains constant every year

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

Simple Interest

Compound Interest

Flat Interest

Reducing Balance Interest

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

No effect

Decreases interest

Increases interest

Makes interest variable

18. The term "annually compounded" refers to:

Doubling the interest rate

Simple interest applied twice

Ignoring the principal

Interest being added once every year

19. Which one is not a method of compounding?

Static

Yearly

Monthly

Daily

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

Interest after time period

Original amount invested or borrowed

Total interest earned

Total amount repaid

21. What does "rate of interest" signify?

The annual income

The percentage of principal paid as interest

The period of investment

The total amount received

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

Rate and time remain the same

Halved and time is doubled

Doubled and time is halved

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

Interest becomes simple

No effect

Decrease in total interest

Increase in total interest

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

Lower the effective return

Higher the effective return

Time required increases

Interest remains constant

25. Which interest model is easiest to manually calculate?

Compound Interest

Reducing Balance Interest

Simple Interest

Continuous Compound Interest

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

CI remains constant over time

CI increases with time

CI becomes SI over time

CI decreases with time

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

Cannot be determined

Zero

Equal to rate

Equal to time

28. Which one of the following can be negative?

Principal

Interest

Time

None of these

29. 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

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

Equal to time

Maximum

Negative

Zero

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

Monthly

All equal

Quarterly

Annually

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

SI is compounded annually

SI is easy to calculate

SI is constant per year

SI increases linearly

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

Taxation value

Total amount

Time in years

Term deposit

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

The lowest amount among compound options

Highest interest return

No interest at all

The same as simple interest

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

Amount

Yield

Total value

Net Worth

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

It depends on principal

Both are equal

Compound Interest

Simple Interest

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

Decreasing time

Fixing interest type

Increasing rate

Decreasing principal

38. What is the formula for calculating Simple Interest?

(Principal × Rate) / Time

(Principal × Rate × Time) / 100

(Principal × Time) / Rate

(Principal + Rate + Time) / 3

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

Interest deducted before investment

Interest calculated only on loans

Interest calculated on the initial principal only

Interest calculated on the principal and the accumulated interest

40. Which formula is used for Compound Interest calculation?

CI = P × R × T / 100

CI = P × (1 + R/100)^T – P

CI = P × T / R

CI = P × R / (1 + T)

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

Rate of interest

Principal amount

Inflation rate

Time period

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

Compounded annually

Compounded monthly

Compounded quarterly

Compounded semi-annually

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

Flat Rate Interest

Quarterly Simple Interest

Monthly Compound Interest

Simple Interest

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

₹1000

₹200

₹500

₹0

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

No Interest

Compound Interest

Decreasing Interest

Simple Interest

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

Doubles

No change

Triples

Halves

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

It decreases

It becomes simple interest

It increases

It remains constant

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

Compounding frequency

Principal

Rate

Time

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

Due to increase in rate

Due to repeated compounding

Due to fixed principal

Due to decrease in time

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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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