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Shortcut Tricks: Simple Interest Video Lecture | CSAT Preparation - UPSC
FAQs on Shortcut Tricks: Simple Interest Video Lecture - CSAT Preparation - UPSC
| 1. What is the formula for calculating simple interest? |  |
Ans. The formula for calculating simple interest (SI) is given by:
\[ \text{SI} = \frac{P \times R \times T}{100} \]
where \( P \) is the principal amount, \( R \) is the rate of interest per annum, and \( T \) is the time in years.
| 2. How can I calculate the total amount after applying simple interest? | |
Ans. To calculate the total amount (A) after applying simple interest, you can use the formula:
\[ A = P + \text{SI} \]
Substituting the SI formula, it becomes:
\[ A = P + \frac{P \times R \times T}{100} \]
So, the total amount is given by:
\[ A = P \left(1 + \frac{R \times T}{100}\right) \]
| 3. What are the key differences between simple interest and compound interest? | |
Ans. The key differences between simple interest and compound interest are:
1. <b>Calculation Method</b>: Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal plus any interest accrued.
2. <b>Growth Rate</b>: In simple interest, the growth is linear, whereas in compound interest, it grows exponentially due to interest on accumulated interest.
3. <b>Applications</b>: Simple interest is commonly used in short-term loans, while compound interest is typically used in savings accounts and long-term investments.
| 4. Can simple interest be negative? | |
Ans. No, simple interest cannot be negative. Simple interest is always a positive figure as it represents the cost of borrowing money or the income earned from lending. The only scenarios where you may see a negative impact on your financial situation would involve fees or penalties, but these are not considered as 'interest.'
| 5. How do I use shortcut tricks for solving simple interest problems quickly? | |
Ans. To solve simple interest problems quickly, you can use the following shortcut tricks:
1. <b>Percentage Conversion</b>: Convert the rate of interest to a fraction for easier calculations.
2. <b>Time Factor</b>: Recognize that if time is in months, convert it to years by dividing by 12.
3. <b>Use of Multiplication</b>: Familiarize yourself with common interest rates (like 10%, 5%) to quickly estimate interest without lengthy calculations.
4. <b>Visual Aids</b>: Create a chart or table for common principal amounts and their corresponding interests for various rates and time periods for quick reference.
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