SIMPLE INTEREST & COMPOUND INTEREST SHORTCUTS FOR QUANTITATIVE APTITUDE
SI - when interest is calculated on the original principal for any length of time .
SI = p*r*t /100 where p= principal, r= rate of interest , t = no. of years
A =P + I =P +PRT/100
or P = 100 * A/100 + RT
( tip) - in counting the no of days between the two given dates the either day (first or last) is excluded.you have to keep in mind that interest is not charged for the day on which money is borrowed but it is charged for the day it is returned.
Q: A sum of Rs 468.75 was lent out at simple interest and at the end of 1 year 8 months the total amount was Rs 500.Find the rate of interest percent per annum.
Ans - I = Rs (500 - 468.75) = Rs 31.25
r = 100*31.25/468.75*5/3 = 100*3125/46875*3/5 = 4
Compound Interest :
A = P{1 + R/100 }n
where A is amount, R is rate of interest, 'n' is no. of years
CI = amount - principal
if the interest is payable half yearly then A = P{1+ R/2 }2T
------
100
Monthly Installment = amount to be paid-down payment/no. of installments
Ø when rates are different for different years , say R1% , R2% ,R3% for 1st , 2nd and 3rd year then,
amount =px[1+r1/100][1+r2/100][1+r3/100]
Q: If the compound interest on a certain sum for 2 years at 3 percent be rs 101.50,What would be the simple interest?
Ans- CI= {1.03*1.03-1} = 609/10000
SI on Rs 1 = 6/100
SI/CI = 6/100*10000/609 = 200/203
SI = 200/203 of Rs 101.50= Rs 200/203*203/2 = Rs 100
