Actual CMAT questions on this topic from past papers, newest first. Each links back to its paper.
A certain amount of money at compound interest grows to ₹66,550 in 3 years and ₹73,205 in 4 years. The rate percent per annum is :
Answer: A
Key idea: under compound interest, each year's amount is the previous year's amount × (1 + r).
\( 1 + r = \frac{73205}{66550} = 1.1 \)
So r = 10% per annum.
(Equivalently, the interest in year 4 is 73205 − 66550 = 6655, which is 10% of 66550.)
Answer: 10%
Ramesh invests ₹1,200 at 5 % simple interest. How much additional money must he invest at 8 % simple interest so that his total annual income will be equal to 6 % of his total investment during this year ?
Answer: B
Asked: the extra amount to invest at 8%.
Let the extra amount be x.
Annual income: 5% of 1200 + 8% of x = 60 + 0.08x.
This should equal 6% of the total investment (1200 + x).
60 + 0.08x = 72 + 0.06x
0.02x = 12, so x = 600.
Alligation check: 5% and 8% averaging 6% gives the ratio (8 − 6) : (6 − 5) = 2 : 1. So the extra money = 1200 / 2 = 600. ✓
Answer: 600
A man borrows Rs 4000 at 15% compound interest. At the end of each year he pays back Rs 1500. How much amount, over and above the Rs 1500 instalment, is required to pay at the end of third year to clear all his dues :
Answer: D
Asked: the extra amount needed at the end of year 3 to clear the loan.
Track the balance year by year at 15% compound interest:
He still makes his usual Rs 1500 payment at the end of year 3. The extra needed to clear everything is 2374.75 − 1500 = Rs 874.75.
Answer: Rs. 874.75
