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Compound Interest — Data Sufficiency Questions & Practice

Practise 2 Compound Interest questions from Data Sufficiency for competitive exams such as UPSC, Banking, SSC and Railway. Read the worked questions below, check every answer with an explanation, and track what you get wrong.

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Practice questions on Compound Interest — with answers

Try each question first, then open the answer. Explanations are included.

1. What is the principal amount invested at compound interest? I. The interest is compounded annually at an unspecified rate. II. The investment tenure was 2 years.

AStatement I alone is sufficient, but Statement II alone is not sufficient
BStatement II alone is sufficient, but Statement I alone is not sufficient
CBoth statements I and II together are sufficient, but neither alone is sufficient
DBoth statements I and II together are not sufficient

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Answer: D

Neither statement gives the rate of interest or the resulting amount/CI value, so even combined, the principal cannot be determined.

2. What is the total amount due on a loan compounded annually for 2 years? I. The principal is Rs. 25,000. II. The borrower has a good credit history.

AStatement I alone is sufficient, but Statement II alone is not sufficient
BStatement II alone is sufficient, but Statement I alone is not sufficient
CBoth statements I and II together are sufficient, but neither alone is sufficient
DBoth statements I and II together are not sufficient

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Answer: D

Neither the principal alone nor credit history gives the rate of interest, so the compound amount cannot be computed even when combined.

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