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    Simple and Compound interest Aptitude formulas

    Simple and Compound interest formulas, shortcuts, tricks and solved examples:

    If P = Principal, A = Amount, R = Rate percent per year, T = T years, S.I = Simple interest, C.I = Compound interest, Then,

    1. For Simple interest:
    (A). S.I = (P × R × T)/100

    (B) A = P + S.I









    2. For Compound interest:

    (A) When interest is compounded yearly,





    (B) When interest is compounded half-yearly,





    (C) When interest is compounded quarterly





    (D) When time is in fraction of a year, say 2⅕





    (E) If rate of interest in 1st year, 2nd year …………..… nth year are R1%, R2% …………. Rn% respectively, then,




    3. Equivalent or Successive interest:
    Single equivalent interest rate or Successive interest rate of 20% and 10% is

    Single equivalent interest rate or Successive interest rate of 10%, 20% and 30% would be
    Since, equivalent interest 10% and 20% is 28%
    So, equivalent interest of 28% and 30% will be,




    Example: 01
    A sum of Rs. 15,500 is lent out into two parts, one at 8% and another one at 6%. If the total annual income is Rs. 1060, the money lent at 8% is:

    Solution:
    Let the money lent at 8% be Rs. x, then
    [(x × 8 × 1)/100] + [15500 - x) × 6 × 1/100] = 1060
    or, 2x + 93000 = 106000
    or, x = 6500
    Therefore, the money lent at 8% is Rs. 6500


    Example: 02
    A sum of money at compound interest amounts to Rs. 10,580 in 2 years and to Rs. 12,176 in 3 years. The rate of interest per annum is:

    Solution:
    Interest on Rs. 10580 for 1 year = Rs. (12176 - 10580) = Rs. 1587
    Rate = [(100 × 1587)/10580]% = 15%
    Hence, the rate of interest per annum is 15%.


    Example: 03
    A sum of money becomes Rs. 13,380 after 3 years and Rs. 20,070 after 6 years on compound interest. The sum is:

    Solution:
    Let, the sum be x, then
                   x[1 + (R/100)]3 = 13380 and, x[1 + (R/100)]6 = 20070
    On dividing, we get, [1 + (R/100)]3 = (20070/13380) = 3/2
                                   x (3/2) = 13380
                                  or, x = 13380 × (3/2) = 8920
    Hence, the sum is Rs. 8920.

    Simple and Compound Interest:
    Formula:                Simple and Compound Interest Formulas
    Solved Examples:  Solved Examples: Set 01
    Practice Test:         Practice Test: 01     Practice Test: 02     Practice Test: 03
                                     Practice Test: 04     Practice Test: 05     Practice Test: 06
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    Item Reviewed: Simple and Compound interest Aptitude formulas Rating: 5 Reviewed By: Pranab Debnath
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