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FRM Part I Simple & Compound Interest Questions
Practise simple & compound interest (quantitative aptitude) for the Financial Risk Manager Part I: 10 multiple-choice questions, each with the correct answer and a worked explanation. Click an option to check it, or “New questions” for another set.
Simple & Compound Interest practice
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Q1.Find the compound interest on $21,000 at 10% per annum for 2 years, compounded annually.
Show answer & explanation
Answer: A — $4,410
A = P(1 + R/100)^T = 21,000 × 1.10^2 = 25,410; CI = A − P = $4,410.
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Q2.Find the compound interest on $31,000 at 10% per annum for 2 years, compounded annually.
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Answer: A — $6,510
A = P(1 + R/100)^T = 31,000 × 1.10^2 = 37,510; CI = A − P = $6,510.
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Q3.Find the compound interest on $27,000 at 5% per annum for 2 years, compounded annually.
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Answer: C — $2,767.5
A = P(1 + R/100)^T = 27,000 × 1.05^2 = 29,767.5; CI = A − P = $2,767.5.
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Q4.Find the simple interest on $14,000 at 6% per annum for 3 years.
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Answer: D — $2,520
SI = P × R × T / 100 = 14,000 × 6 × 3 / 100 = $2,520.
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Q5.Find the compound interest on $25,000 at 20% per annum for 3 years, compounded annually.
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Answer: C — $18,200
A = P(1 + R/100)^T = 25,000 × 1.20^3 = 43,200; CI = A − P = $18,200.
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Q6.Find the compound interest on $14,000 at 5% per annum for 3 years, compounded annually.
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Answer: D — $2,206.75
A = P(1 + R/100)^T = 14,000 × 1.05^3 = 16,206.75; CI = A − P = $2,206.75.
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Q7.Find the compound interest on $17,000 at 5% per annum for 2 years, compounded annually.
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Answer: D — $1,742.5
A = P(1 + R/100)^T = 17,000 × 1.05^2 = 18,742.5; CI = A − P = $1,742.5.
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Q8.Find the simple interest on $18,000 at 4% per annum for 4 years.
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Answer: A — $2,880
SI = P × R × T / 100 = 18,000 × 4 × 4 / 100 = $2,880.
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Q9.Find the simple interest on $45,000 at 4% per annum for 3 years.
Show answer & explanation
Answer: B — $5,400
SI = P × R × T / 100 = 45,000 × 4 × 3 / 100 = $5,400.
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Q10.Find the simple interest on $25,000 at 8% per annum for 4 years.
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Answer: A — $8,000
SI = P × R × T / 100 = 25,000 × 8 × 4 / 100 = $8,000.
How to approach simple & compound interest questions
Simple interest grows linearly (PRT/100); compound interest multiplies by (1 + r/100) each period. For 2 years, CI − SI = P(r/100)² — a common shortcut.
About FRM Part I
Financial Risk Manager Part I — conducted by Global Association of Risk Professionals (GARP). Foundations of risk management, quantitative analysis, markets and valuation.
Original practice questions written for this site in the style and difficulty of each exam’s syllabus. They are not past papers and the site is not affiliated with any exam body. Exam patterns, marking schemes and syllabi change — always check the latest official notification.
FRM Part I practice topics
| Topic | Section | Question source |
|---|---|---|
| Probability & Combinatorics | Mathematics | Calculated (new numbers every set) |
| Accounting & Finance | Finance | Calculated + question bank |
| Simple & Compound Interest | Quantitative aptitude | Calculated (new numbers every set) |
| Averages & Statistics | Quantitative aptitude | Calculated (new numbers every set) |