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TNPSC simple and compound interest practice questions

By the PrepMatic team · Updated 9 Oct 2026 · 3 min read

Simple interest and compound interest are listed separately in the TNPSC aptitude syllabus, which suggests that you should expect at least one question from each in a paper. Both are formula-driven and short, so they are among the most dependable marks in the aptitude section, provided you keep the formulas straight. The five questions below mix the two and include one comparison. For the surrounding syllabus, go to TNPSC aptitude and mental ability.

What this topic covers

• Simple interest: interest, principal, rate and time, and how to find any one of them.
• Compound interest: annual compounding, and half-yearly or quarterly compounding at SSLC level.
• Comparison: the difference between simple and compound interest over two years.
• Growth and doubling: how long or at what rate a sum doubles.

Sample questions

Question 1

The simple interest on ₹5,000 at 8% per annum for 3 years is:

• A. ₹1,000
• B. ₹1,500
• C. ₹2,000
• D. ₹1,200

Question 2

What principal will earn simple interest of ₹900 in 3 years at 5% per annum?

• A. ₹4,500
• B. ₹5,000
• C. ₹6,000
• D. ₹7,500

Question 3

The compound interest on ₹10,000 at 10% per annum for 2 years, compounded annually, is:

• A. ₹2,100
• B. ₹2,000
• C. ₹2,200
• D. ₹1,000

Question 4

At what rate of simple interest per annum will a sum of money double itself in 10 years?

• A. 5%
• B. 10%
• C. 8%
• D. 20%

Question 5

The difference between the compound interest and the simple interest on ₹2,000 at 5% per annum for 2 years is:

• A. ₹50
• B. ₹10
• C. ₹5
• D. ₹2

Answers and explanations

1. D. SI = 5,000 × 8 × 3 ÷ 100 = ₹1,200.
2. C. P = SI × 100 ÷ (R × T) = 900 × 100 ÷ (5 × 3) = 90,000 ÷ 15 = ₹6,000.
3. A. After 2 years the amount is 10,000 × 1.1 × 1.1 = ₹12,100, so CI = 12,100 − 10,000 = ₹2,100. Simple interest would give only ₹2,000, and the extra ₹100 is interest on the first year's interest.
4. B. To double, the interest must equal the principal: P = P × R × 10 ÷ 100, so R = 10%.
5. C. For 2 years, CI − SI = P × (R ÷ 100) squared = 2,000 × (5 ÷ 100) squared = 2,000 × 0.0025 = ₹5. You can confirm it: SI = ₹200, and CI = 2,000 × 1.05 × 1.05 − 2,000 = ₹205.

How to prepare interest questions

Keep two short routines in your head. For simple interest, convert the three known quantities and the unknown into the formula and rearrange. For compound interest, calculate year by year for two or three years instead of using powers, because multiplying by 1.1 or 1.05 repeatedly is quick and clear.

Know the traps. The first is time in months: 6 months is 0.5 of a year, so 6 months at 8% per year earns 4% of the principal. The second is "per annum" against "half-yearly": a half-yearly rate halves the rate and doubles the number of periods. The third is mixing amount and interest. If the question asks for the amount, add the principal back.

The two-year difference formula in question 5 is worth memorising, since it saves a full calculation in an exam. A three-year version also exists, but at SSLC level a two-year question is far more likely.

Strengthen the arithmetic that sits under all of this with TNPSC percentage practice and TNPSC simplification practice.

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