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Simple Interest and Compound Interest Tips and Tricks for Government Exams

Introduction

  • Interest
    When some one take up some money from other for the personal or commercial purpose we pay some additional money to him after a certain period of time is called Interest. So, we can also called this Interest as Simple Interest.
    Simple Interest and Compound Interest Tips and Tricks for Government Exams
  • Principal
    So, the concept of Principal is very simple. When money borrow for a certain time period called Principal or Sum.
  • Amount
    The Addition of Simple Interest and Principal is called Amount.
    Amount (A) = Simple Interest (SI) + Principal (P).
    Simple Interest (SI) = Amount (A) – Principal (P).
  • Per annual means
    Per annual means for a year.
    • Few general terms of Interest
    • P = Principal
    • R = Rate per annual
    • T = Number of years

Theory

  • We try to provide all types of shortcut tricks on simple interest and compound interest here. Visitors are requested to carefully read all shortcut examples. These examples here will help you to better understand shortcut tricks on simple interest and compound interest.
  • First of all do a practice set on math of any exam. Choose any twenty math problems and write it down on a page. Do first ten maths using basic formula of this math topic. You also need to keep track of the time. Write down the time taken by you to solve those questions. Now read our examples on simple interest and compound interest shortcut tricks and practice few questions. After finishing this do remaining questions using simple interest and compound interest shortcut tricks. Again keep track of timing. This time you will surely see improvement in your timing. But this is not enough. You need to practice more to improve your timing more.

Formula

  1. SI = P x R x T/100 
  2. Principal = Simple Interest × 100/ R × T
  3. Rate of Interest = Simple Interest  × 100 / P × T
  4. Time = Simple Interest × 100 / P × R
  5. If the rate of Simple interest differs from year to year, then
    Simple Interest = Principal × (R1+R2+ R3…..)/100
    • The four variables in the above formula are: SI = Simple Interest P = Principal Amount (This the amount invested)T = Number of years R = Rate of interest (per year) in percentage
    • A sum of money is divided into n parts in such a way that the interest on the first part at r1% for t1 years, on the second part at r2% for t2 years, on the third part at r3% for t3 years, and so on, are equal. Then the ratio in which the sum is divided in n part is: 1/r× t: 1/r2 × t: 1/r× t3  

Solved Examples

Question for Tips & Tricks: Simple Interest & Compound Interest
Try yourself:Rs. 12000 was invested for 2 years, partly in scheme A at the rate of 5% SI per annum and partly in scheme B at the rate of 8% SI per annum. The total interest received at the end was Rs.1800. What amount of money was invested in scheme A ?
View Solution

Question for Tips & Tricks: Simple Interest & Compound Interest
Try yourself:A sum was put at a certain rate of interest for four years. Had it been put at a rate of interest 4% higher than the previous rate of interest, it would have fetched Rs. 80 more. What is the sum ?
View Solution

Question for Tips & Tricks: Simple Interest & Compound Interest
Try yourself:

What is the difference between the CI and SI on Rs.6500 at the rate of 4 pcpa in 2 yrs ?

View Solution

Question for Tips & Tricks: Simple Interest & Compound Interest
Try yourself:

The CI on a certain sum at 10% pa for 2yrs is Rs.6548. What is SI on the sum of money at 7%pa for 4 yrs(approx) ?

View Solution

The document Simple Interest and Compound Interest Tips and Tricks for Government Exams is a part of the Bank Exams Course Tips & Tricks for Government Exams.
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FAQs on Simple Interest and Compound Interest Tips and Tricks for Government Exams

1. What is the formula for calculating simple interest?
Ans. The formula for calculating simple interest is: I = PRT, where I is the interest, P is the principal amount, R is the rate of interest, and T is the time in years.
2. How is compound interest different from simple interest?
Ans. Compound interest is calculated on the initial principal amount as well as the accumulated interest from previous periods, while simple interest is only calculated on the initial principal amount.
3. What is the formula for calculating compound interest annually?
Ans. The formula for calculating compound interest annually is: A = P(1 + r/n)^(nt), where A is the amount, P is the principal amount, r is the annual interest rate, n is the number of times that interest is compounded per year, and t is the number of years.
4. How does the frequency of compounding affect the total amount of compound interest earned?
Ans. The more frequently interest is compounded, the higher the total amount of compound interest earned. This is because interest is added to the principal more often, resulting in a higher overall amount.
5. Can compound interest be negative?
Ans. No, compound interest cannot be negative. Negative interest rates may result in a decrease in the total amount of money, but the concept of compound interest itself does not result in negative interest.
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