FAQs on Hacks for solving Interest Questions Video Lecture  CSAT Preparation  UPSC
1. What are some common formulas used to solve interest questions? 

Ans. Some common formulas used to solve interest questions are:
1. Simple Interest (SI) formula: SI = P * R * T / 100, where P is the principal amount, R is the rate of interest, and T is the time period.
2. Compound Interest (CI) formula: CI = P * (1 + R/100)^T  P, where P is the principal amount, R is the rate of interest, and T is the time period.
3. Future Value (FV) formula: FV = P * (1 + R/100)^T, where P is the principal amount, R is the rate of interest, and T is the time period.
4. Present Value (PV) formula: PV = FV / (1 + R/100)^T, where FV is the future value, R is the rate of interest, and T is the time period.
2. What is the difference between simple interest and compound interest? 

Ans. Simple interest is calculated only on the principal amount, while compound interest is calculated on both the principal amount and the accumulated interest. In simple interest, the interest remains constant throughout the time period, while in compound interest, the interest keeps increasing with each compounding period. Compound interest usually yields higher returns compared to simple interest for the same principal amount and time period.
3. How can I calculate the time period if the principal amount, rate of interest, and interest are given? 

Ans. To calculate the time period, you can use the formula: T = (100 * SI) / (P * R), where T is the time period, SI is the simple interest, P is the principal amount, and R is the rate of interest. Similarly, for compound interest, you can use the formula: T = (log(FV/P)) / (log(1 + R/100)), where T is the time period, FV is the future value, P is the principal amount, and R is the rate of interest.
4. How can I calculate the principal amount if the rate of interest, time period, and interest are given? 

Ans. To calculate the principal amount, you can use the formula: P = (100 * SI) / (R * T), where P is the principal amount, SI is the simple interest, R is the rate of interest, and T is the time period. Similarly, for compound interest, you can use the formula: P = FV / (1 + R/100)^T, where P is the principal amount, FV is the future value, R is the rate of interest, and T is the time period.
5. Can you provide an example of how to solve a compound interest question? 

Ans. Sure! Let's say you invest $5000 at a compound interest rate of 8% per annum for a period of 3 years. To calculate the future value, you can use the formula: FV = P * (1 + R/100)^T.
Plugging in the values, we get:
FV = 5000 * (1 + 8/100)^3
FV = 5000 * (1.08)^3
FV = 5000 * 1.2597
FV = $6298.50
Therefore, the future value after 3 years would be $6298.50.