Practice Questions for Arithmetic - Simple & Compound Interest

1. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

How much stock can be purchased for Rs. 6900 at 92?

A.
Rs. 7200
B.
Rs. 7500
C.
Rs. 7250
D.
Rs. 7400

Answer: Option B

Explanation :

Stock purchased =Rs. $\frac{100}{92} \times 6900$ = Rs. 7500

Hence, option (b).

2. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

How much stock can be bought for Rs. 8400 at 105?

A.
Rs. 8000
B.
Rs. 8050
C.
Rs. 8250
D.
Rs. 8450

Answer: Option A

Explanation :

Stock bought = Rs. $\frac{100}{105} \times 8400$ = Rs. 8000

Hence, option (a).

3. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

How much $3 \frac{1}{2}$ % stock at 5 below par can be purchased by investing Rs. 4750?

A.
Rs. 4900
B.
Rs. 4950
C.
Rs. 5000
D.
Rs. 5200

Answer: Option C

Explanation :

Stock purchased = Rs. $\frac{100}{95} \times 4750$ = Rs. 5000

Hence, option (c).

4. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

How much of 3% stock at 110 should be bought to get an annual income of Rs. 210?

A.
RS. 7500
B.
Rs. 7250
C.
Rs. 7000
D.
Rs. 7850

Answer: Option C

Explanation :

3% of stock = 210

∴ Stock = $\frac{210}{3} \times 100$ =7000

Hence, option (c).

5. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

How much money must be invested to purchase Rs. 3300 for $4 \frac{1}{2} %$ stock $89 \frac{3}{4} %$ ("brokerage" = $\frac{1}{4} %$ )

A.
Rs. 3000
B.
Rs. 2870
C.
Rs. 2970
D.
Rs. 2907

Answer: Option C

Explanation :

Net value of a Stock Rs. 100 = Rs. on Rs. 90

∴ Stock of Rs. 3300 stock can be purchased by investing Rs. $\frac{90}{100} \times 3300 = 2970$

Hence, option (c).

6. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

What sum of money must be invested in 5% stock at 105 to obtain an annual income of Rs. 230?

A.
Rs. 4830
B.
Rs. 4800
C.
Rs. 4820
D.
Rs. 4730

Answer: Option A

Explanation :

To obtain Rs. 5 income investment = Rs. 105

∴ to obtain Rs. 230 as income, investment = $\frac{105}{5} \times 230 = 4830$

Hence, option (a).

7. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

What sum of money must a man invest in 6% stock at 105 to get a net income of Rs. 255 after deduction of income tax at the rate of 15%.

A.
Rs. 5200
B.
Rs. 5250
C.
Rs. 5280
D.
Rs. 5295

Answer: Option B

Explanation :

Money received by investing Rs. 105 = 85% of Rs. 6 = Rs. 5.10

∴ Sum invested = $\frac{105}{5.10} \times 255 = 5250$

Hence, option (b).

8. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

A man bought Rs. 3750 stock at par and sold it out when it was quoted at Rs. 105. What was his gain or loss?

A.
Rs. 187.50 P
B.
Rs. 178.50 P
C.
Rs. 177.50 P
D.
Rs. 167.50 P

9. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

A man invested Rs. $83 \frac{1}{2} 6870$ in Government paper at $85 \frac{3}{4}$ and sold it at . Find his loss, if the brokerage is 1/8 (both ways)

A.
Rs. 180
B.
Rs. 200
C.
Rs. 210
D.
Rs. 317.50

Answer: Option B

Explanation :

Money invested in Rs. 100 stock = $85 \frac{3}{4} + \frac{1}{8} = 85 \frac{7}{8}$

Money received = $83 \frac{1}{2} - \frac{1}{8} = 83 \frac{3}{8}$

Loss on Rs. $85 \frac{7}{8} = R s . 85 \frac{7}{8} - 83 \frac{3}{8} = R s . 2 \frac{1}{2}$

∴ Loss on Rs. 6870 = $R s . \frac{2 \frac{1}{2}}{85 \frac{7}{8}} \times 6870 = 200$

Hence, option (b).

10. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

A man holding Rs. 3000 of $3 \frac{1}{2} %$ stock sells it at $63 \frac{1}{8}$ and invests the proceeds in 5% stock at $74 \frac{7}{8}$ Find the change in his income ("brokerage" = $\frac{1}{8} %$ )

A.
Rs. 19 increase
B.
Rs. 21 decrease
C.
Rs. 18 increase
D.
Rs. 21 increase

Answer: Option D

Explanation :

Income from first stock = $3 \frac{1}{2} %$ of 3000 = Rs. 105

∴ total sale proceeds from first stock = $(63 \frac{1}{8} - \frac{1}{8}) = 63$ of Rs. 100

∴ Total sale proceeds $\frac{63}{100} \times 3000 = R s . 1890$

New purchase price of Rs. 100 stock = Rs. $(74 \frac{7}{8} + \frac{1}{8}) = R s . 75$

Income from 2nd stock = $\frac{5}{75} \times 1890 = 126$

∴ Income increase = 126 – 105 = 21

Hence, option (d).

11. CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

By investing Rs. 8000 partly in 8% stock at 80 and partly in 10% stock at 110, I get an annual income of Rs. 750. How much do I invest in 10% stock.

A.
Rs. 5500
B.
Rs. 4500
C.
Rs. 3500
D.
Rs. 2500

Answer: Option A

Explanation :

Income on Rs. 1 from 1st Stock = Rs. $\frac{8}{80}$ = Rs. $\frac{1}{10}$

Income on Rs. 1 from 2nd Stock = Rs. $\frac{10}{100}$ = Rs. $\frac{1}{11}$

Mean income on Rs. 1 = Rs. $\frac{750}{8000}$ = Rs. $\frac{3}{32}$

By Method of Alligation

Ratio in which the money is invested = 5 : 11

∴ Money invested in 10% stock = $\frac{11}{16}$ × 8000 = 5500

Hence, option (a).

CRE 5 - Stocks and Bonds | Arithmetic - Simple & Compound Interest

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