UPSC  >  Important Formulae: Interests

# Important Formulae: Interests - CSAT Preparation - UPSC

• Amount = Principal + Interest
• Simple Interest = PNR/100
• Compound Interest =
• Population formula P’ =
• Depreciation formula = Initial Value x
EduRev's Tip: SI and CI are same for a certain sum of money (P) at a certain rate (r) per annum for the first year. The difference after a period of two years is given by
⇒ Δ = PR2/1002

Growth and Growth Rates
Absolute Growth = Final Value – Initial Value
Growth rate for one year period  =
SAGR or AAGR =
CAGR =
EduRev's Tip: If the time period is more than a year, CAGR < AAGR. This can be used for approximating the value of CAGR instead of calculating it.

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## FAQs on Important Formulae: Interests - CSAT Preparation - UPSC

 1. What is the formula to calculate simple interest?
Ans. The formula to calculate simple interest is: Simple Interest = (Principal x Rate x Time) / 100 Where Principal is the initial amount of money, Rate is the interest rate per annum, and Time is the duration for which the interest is calculated.
 2. How can I calculate compound interest?
Ans. To calculate compound interest, you can use the following formula: Compound Interest = Principal x (1 + Rate/100) ^ Time - Principal Where Principal is the initial amount of money, Rate is the interest rate per annum, and Time is the duration for which the interest is calculated. The formula takes into account the compounding effect, which means that the interest is calculated not only on the initial principal but also on the accumulated interest.
 3. What is the difference between simple interest and compound interest?
Ans. The main difference between simple interest and compound interest lies in how the interest is calculated. In simple interest, the interest is calculated only on the initial principal amount. It does not take into account any accumulated interest over time. The formula to calculate simple interest is straightforward. On the other hand, compound interest takes into account the accumulated interest as well. The interest is calculated not only on the initial principal but also on the accumulated interest. This results in higher interest payments over time. The formula to calculate compound interest is more complex.
 4. How can I calculate the rate of interest if I know the principal, time, and simple interest amount?
Ans. If you know the principal, time, and simple interest amount, you can calculate the rate of interest using the following formula: Rate = (Simple Interest x 100) / (Principal x Time) Simply substitute the values of the principal, time, and simple interest into the formula to find the rate of interest.
 5. Can I use the compound interest formula for different compounding periods?
Ans. Yes, you can use the compound interest formula for different compounding periods. The formula remains the same, but you need to adjust the values of the interest rate and time accordingly. For example, if the interest is compounded annually, you would use the annual interest rate and the number of years as the time. If the interest is compounded semi-annually, you would use half of the annual interest rate and double the number of years as the time. Similarly, for quarterly or monthly compounding, you would adjust the values accordingly.

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