General Aptitude: Example for Compound Interest

Formulas :

Let Principal = P, Time= T and Rate=% per annum.

2. When interest is compound annually :

3. When interest is compounded half-yearly :

4. When interest is compounded Quarterly :

5. Difference between Simple Interest and Compound Interest for 2 years

6. Difference between Simple Interest and Compound Interest for 3 years

7. Simple Interest into Compound Interest or Compound Interest into Simple Interest for 2 years

Examples

1. Find the compound interest on Rs.1600 at 8% per annum for 2 years.

Solution
Here P=1600, R=8%, T=2 years (because interest is yearly)
Then

A = 1866.24 Ans

2. What amount of compound interest can be obtained on an amount of Rs.8,840 at the rate of 5 p.c.p.a. at the end of 3 years?

Solution
Here P=8840 , R=5%, T=3 years
Then

C.I = Rs.1393.405

3. What approximate amount of compound interest can be obtained on an amount of Rs.9,650 at the rate of 6 p.c.p.a. at the end of 3 years?

Solution
Here P=9650 R=6%, T=3 years
Then

   = 9650(1.191016-1)
   = 9650 * 0.191016
   C.I = Rs. 1843 ( approximate )

4. Find the compound interest on Rs.4000 for 9 months at 20% per annum when the interest is reckoned half yearly.

Solution

P=4000, R=

Time = 1 half year + half year

= Rs.4620

C.I = ( 4620 - 4000 ) = Rs.620 Ans

5. What would be the compound interest obtained on an amount of Rs.6000 at the rate of 7 p.c.p.a. after 2 years ?

Solution

P = 6000 , R = 7% , T = 2 years

A = 6869.4
C.I = A - P
= 6869.4 - 6000
C.I = 869.4 Ans

6. What would be the compound interest obtained on an amount of Rs.8800 at the rate of 16 p.c.p.a. after 2 years ?

Solution

P = 8800 , R = 16% , T = 2 years

A = 11841.28
C.I = A - P
= 11841.28 - 8800
C.I = 3041.28 Ans

7. The compound interest on a certain amount for 2 years at the rate of 8 p.c.p.a is Rs.312. What will be the simple interest on the same amount and at the same rate and same time?

Solution

S.I = Rs.300 Ans

8. Vinita invested a certain amount at the rate of 8 p.c.p.a for 5 years and obtained a simple interest of Rs.3800. Had she invested the same amount at the same rate of interest for 2 years, how much amount would she have obtained as compound interest at the end of 2 years?

Solution

C.I = 3952 For 5 years
C.I for 2 years

C.I =Rs.1580.80 Ans

9. If Compound interest on a certain sum for 2 years at 12.5% per annum is Rs.170, the simple interest is:

Solution

S.I = Rs.160 Ans

10. The difference between simple and compound interest and simple interest on an amount of Rs.15000 for 2 years is Rs.96. What is the rate of interest per annum?

Solution

= 64
r = 8 Ans

11. The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Rs.1. Sum(in Rs) is

Solution