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

Increases interest

No effect

Decreases interest

Makes interest variable

2. What does "rate of interest" signify?

The total amount received

The annual income

The period of investment

The percentage of principal paid as interest

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

Because it is lower

Because it reduces over time

Because it grows exponentially

Because it’s fixed

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

Long-term home loan

Short-term personal loan

Recurring deposit

Fixed deposit

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

Interest is never added to principal

Interest is added to principal once every year

Interest is paid at the end of 2 years

Interest is added to principal every month

6. Which one is not a method of compounding?

Static

Monthly

Daily

Yearly

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

Compounded monthly

Compounded semi-annually

Compounded annually

Compounded quarterly

8. Which interest model is easiest to manually calculate?

Continuous Compound Interest

Simple Interest

Compound Interest

Reducing Balance Interest

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

Long-term investment

Monthly grocery spending

One-time purchase

Short-term loan

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

Interest after time period

Total interest earned

Original amount invested or borrowed

Total amount repaid

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

Taxation value

Time in years

Term deposit

Total amount

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

Fixing interest type

Decreasing time

Increasing rate

Decreasing principal

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

Annually

Monthly

Quarterly

All equal

14. What is the formula for calculating Simple Interest?

(Principal + Rate + Time) / 3

(Principal × Rate × Time) / 100

(Principal × Time) / Rate

(Principal × Rate) / Time

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

No interest at all

The same as simple interest

The lowest amount among compound options

Highest interest return

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

Halved and time is doubled

Rate and time remain the same

Halved and time is doubled

Doubled and time is halved

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

SI increases linearly

SI is easy to calculate

SI is constant per year

SI is compounded annually

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

No change

Triples

Doubles

Halves

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

Yield

Amount

Net Worth

Total value

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

It becomes simple interest

It increases

It decreases

It remains constant

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

CI becomes SI over time

CI remains constant over time

CI increases with time

CI decreases with time

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

Maximum

Zero

Negative

Equal to time

23. Which one of the following can be negative?

Principal

Interest

None of these

Time

24. If interest is calculated using the formula

Compound Interest

Simple Interest

Flat Interest

No Interest

which type of interest is being used?

25. The term "annually compounded" refers to:

Simple interest applied twice

Doubling the interest rate

Ignoring the principal

Interest being added once every year

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

Interest rate is very low

Rate is 0%

Rate is 100%

Interest is compounded annually

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

Always greater than Simple Interest

Always less than Simple Interest

Always equal to Simple Interest

Sometimes less, sometimes more

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

Zero

Equal to rate

Equal to time

Cannot be determined

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

Interest calculated on the principal and the accumulated interest

Interest deducted before investment

Interest calculated only on loans

Interest calculated on the initial principal only

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

Principal

Compounding frequency

Time

Rate

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

Reducing Balance Method

Flat Interest

Compound Interest

Simple Interest

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

Only Compound Interest

Reducing Interest

Flat Rate Interest

Simple and Compound Interest

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

No Interest

Simple Interest

Decreasing Interest

Compound Interest

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

Due to fixed principal

Due to decrease in time

Due to increase in rate

Due to repeated compounding

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

Net Interest

Simple Interest

Compound Interest

Gross Interest

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

Flat Rate Interest

Simple Interest

Quarterly Simple Interest

Monthly Compound Interest

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

Bonus

Interest on interest

Compound effect

Principal

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

Interest rates are high

Loan duration is long

Loan duration is short

Loan amount is large

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

It is only applicable on savings accounts

It includes interest on previously accumulated interest

It is always less than Simple Interest

It remains constant every year

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

Time

Rate

Mode of repayment

Principal

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

Lower the effective return

Time required increases

Interest remains constant

Higher the effective return

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

Decrease in time

Both A and B

Decrease in rate

Increase in time

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

Inflation rate

Time period

Principal amount

Rate of interest

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

Zero

Greater than Simple Interest

Equal to Simple Interest

Less than Simple Interest

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

Simple Interest

Compound Interest

Flat Interest

Reducing Balance Interest

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

Increase in total interest

Decrease in total interest

No effect

Interest becomes simple

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

Simple Interest

Both are equal

Compound Interest

It depends on principal

48. Which formula is used for Compound Interest calculation?

CI = P × T / R

CI = P × R × T / 100

CI = P × R / (1 + T)

CI = P × (1 + R/100)^T – P

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

₹500

₹1000

₹200

₹0

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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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