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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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Page 1 of 2

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

Compounded quarterly

Compounded annually

Compounded semi-annually

Compounded monthly

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

Amount

Total value

Yield

Net Worth

3. What does "rate of interest" signify?

The total amount received

The annual income

The period of investment

The percentage of principal paid as interest

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

Reducing Balance Method

Simple Interest

Compound Interest

Flat Interest

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

Simple Interest

It depends on principal

Both are equal

Compound Interest

6. Which interest model is easiest to manually calculate?

Compound Interest

Reducing Balance Interest

Simple Interest

Continuous Compound Interest

7. If interest is calculated using the formula

Simple Interest

No Interest

Compound Interest

which type of interest is being used?

Flat Interest

8. Which one is not a method of compounding?

Static

Monthly

Daily

Yearly

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

Flat Interest

Compound Interest

Reducing Balance Interest

Simple Interest

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

Triples

Doubles

Halves

No change

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

Greater than Simple Interest

Zero

Less than Simple Interest

Equal to Simple Interest

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

Equal to time

Cannot be determined

Equal to rate

Zero

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

Principal amount

Time period

Inflation rate

Rate of interest

14. The term "annually compounded" refers to:

Interest being added once every year

Doubling the interest rate

Ignoring the principal

Simple interest applied twice

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

CI becomes SI over time

CI decreases with time

CI remains constant over time

CI increases with time

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

Annually

Monthly

All equal

Quarterly

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

Decreasing principal

Decreasing time

Increasing rate

Fixing interest type

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

Lower the effective return

Time required increases

Interest remains constant

Higher the effective return

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

Compound Interest

Gross Interest

Net Interest

Simple Interest

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

Because it’s fixed

Because it is lower

Because it grows exponentially

Because it reduces over time

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

Rate is 0%

Interest is compounded annually

Interest rate is very low

Rate is 100%

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

SI increases linearly

SI is constant per year

SI is compounded annually

SI is easy to calculate

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

It increases

It remains constant

It decreases

It becomes simple interest

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

Negative

Maximum

Zero

Equal to time

25. 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

Page 2 of 2

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

Compounding frequency

Time

Principal

Rate

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

Both A and B

Increase in time

Decrease in rate

Decrease in time

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

Loan amount is large

Loan duration is long

Interest rates are high

Loan duration is short

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

No effect

Makes interest variable

Increases interest

Decreases interest

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

Due to decrease in time

Due to increase in rate

Due to repeated compounding

Due to fixed principal

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

₹500

₹1000

₹200

₹0

32. Which formula is used for Compound Interest calculation?

CI = P × R × T / 100

CI = P × R / (1 + T)

CI = P × T / R

CI = P × (1 + R/100)^T – P

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

Simple Interest

Monthly Compound Interest

Flat Rate Interest

Quarterly Simple Interest

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

Interest becomes simple

Decrease in total interest

No effect

Increase in total interest

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

Total amount

Term deposit

Time in years

Taxation value

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

Mode of repayment

Principal

Time

Rate

37. Which one of the following can be negative?

None of these

Time

Principal

Interest

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

Doubled and time is halved

Rate and time remain the same

Halved and time is doubled

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

Interest on interest

Principal

Compound effect

Bonus

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

Interest is added to principal once every year

Interest is paid at the end of 2 years

Interest is added to principal every month

Interest is never added to principal

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

Short-term personal loan

Long-term home loan

Recurring deposit

Fixed deposit

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

Original amount invested or borrowed

Interest after time period

Total interest earned

Total amount repaid

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

The lowest amount among compound options

No interest at all

The same as simple interest

Highest interest return

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

Reducing Interest

Only Compound Interest

Simple and Compound Interest

Flat Rate Interest

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

Interest deducted before investment

Interest calculated on the initial principal only

Interest calculated on the principal and the accumulated interest

Interest calculated only on loans

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

One-time purchase

Monthly grocery spending

Long-term investment

Short-term loan

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

It remains constant every year

It includes interest on previously accumulated interest

It is always less than Simple Interest

It is only applicable on savings accounts

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

No Interest

Decreasing Interest

Compound Interest

Simple Interest

49. What is the formula for calculating Simple Interest?

(Principal × Time) / Rate

(Principal + Rate + Time) / 3

(Principal × Rate × Time) / 100

(Principal × Rate) / Time

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Mustansar KhanLast Updated: July 2, 2025

Quantitative Reasoning Simple and Compound Interest Online Test

Quantitative Reasoning Aptitude Test

Simple and Compound Interest Test Online

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