Simple & Compound Interest PYQs for UPSC (2011-2024) | Solved Questions & PDF Download

Master Simple Interest (SI) and Compound Interest (CI) concepts for UPSC with solved Previous Year Questions (PYQs) from 2011 to 2024. This comprehensive guide provides step-by-step solutions, shortcut formulas, and a free downloadable PDF to help you crack all interest-related problems in UPSC CSAT.

Why Interest Problems Matter in UPSC CSAT?

Interest calculation questions are frequently asked in UPSC CSAT (Paper II) to test:

  • ➡️ Your ability to calculate financial returns
  • ➡️ Understanding of growth and depreciation concepts
  • ➡️ Skills in solving real-world banking and investment problems

This page covers all SI & CI PYQs with smart calculation techniques.

 

Year-Wise Interest PYQs (2011-2024)

Q1. As per agreement with a bank, a businessman had to refund a loan in some equal installments without interest. After paying 18 installments he found that 60 percent of his loan was refunded. How many installments were there in the agreement? [CSAT 2014]

(a) 22

(b) 24

(c) 30

(d) 33

Solution:

Given that,

As per agreement with a bank, a businessman had to refund a loan in some equal installments without interest.

After paying 18 installments he found that 60 percent of his loan was refunded.

Now,

Let the amount of installment be A

Total amount = T

So,

18 x A = (60/100) x T

T/ A = 30

Number of installments = 30

Hence option (c) is correct

Q2. A person bought a refrigerator worth Rs. 22,800 with 12.5% interest compounded yearly. At the end of first year he paid Rs. 8,650 and at the end of second year Rs. 9,125. How much will he have to pay at the end of third year to clear the debt? [CSAT 2018]

(a) Rs. 9,990

(c) Rs. 10,590

(b) Rs. 10,000

(d) Rs. 11,250

Solution:

Given that,

A person bought a refrigerator worth Rs. 22,800 with 12.5% interest compounded yearly.

At the end of first year he paid Rs. 8,650 and at the end of second year Rs. 9,125

Now,

Principle amount = 22800

Interest rate = 12.5%

After 1st year interest = 12.5% of 22800 = 2850

Total principle amount remaining = 22800 + 2850 - 8650 = Rs. 17000

Second year = 12.5% of 17000 = Rs. 2125

Total principle amount remaining = 17000 + 2125 - 9125 = Rs. 10000

Third year = 12.5% of 10000 = 1250

Amount to clear the debt = 10000 + 1250 = Rs. 11250

Hence option (d) is correct

Q3. A principal P becomes Q in 1 year when compounded half-yearly with R% annual rate of interest. If the same principal P becomes Q in 1 year when compounded annually with S% annual rate of interest, then which one of the following is correct? [CSAT 2023]

(a) R=S

(b) R>S

(c) R

(d) R<S

Solution:

Given that,

A principal P becomes Q in 1 year when compounded half-yearly with R% annual rate of interest.

If the same principal P becomes Q in 1 year when compounded annually with S% annual rate of interest

Now,

Let the principle amount be Rs.1000 and annual rate of interest is 10% compounded yearly

First half of the year (as compounded half yearly) = 1000 + [1000 x (10/2)]/100 = Rs 1050

Second half = 1050 + [1050 x (10/2)]/100 = Rs. 1102.5

If compounded annually, then

Amount = 1000 + [1000 x (10)]/100 = Rs.1100

Thus the interest rate has to be less compounded half yearly then annually

Therefore R < S

Hence option (c) is correct

ANSWER KEY

1.      C

2.      D

3.      C

 

Download Direction Sense PYQs PDF

FAQs on Direction Sense for UPSC

1. How many interest questions appear in CSAT?

➡️ Typically 2-3 questions annually in CSAT Paper II.

2. What are the most common interest problems?

➡️ Simple interest calculations (40%)

➡️ Compound interest comparisons (30%)

➡️ Difference between CI and SI (20%)

➡️ Installment problems (10%)

3. Any quick calculation tips?

✔️ For 2 years, CI - SI = PR²/10000
✔️ For quick CI, use binomial approximation for small rates
✔️ Convert time periods carefully for half-yearly/quarterly compounding
✔️ Remember SI is linear growth, CI is exponential growth

Conclusion

Mastering Interest PYQs can secure you easy marks in CSAT. This page provides:
✅ All PYQs from 2011-2024
✅ PDF with 50+ solved problems
✅ Time-saving calculation methods

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