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Simple Interest and Compound Interest Cat Formulas PDF

This document provides 7 tips for simple interest (S.I.) and compound interest (C.I.): 1) S.I. interest and principal remain constant each period, while for C.I. the interest is added to the principal each compounding period, increasing the amount. 2) For the same principal, rate, and time, C.I. will always be greater than S.I. 3) The S.I. formula is: Interest = Principal x Rate x Time / 100. The C.I. formula for annual compounding is: Amount = Principal x (1 + Rate/100)^Time.

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Gautam Sai Teza
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717 views10 pages

Simple Interest and Compound Interest Cat Formulas PDF

This document provides 7 tips for simple interest (S.I.) and compound interest (C.I.): 1) S.I. interest and principal remain constant each period, while for C.I. the interest is added to the principal each compounding period, increasing the amount. 2) For the same principal, rate, and time, C.I. will always be greater than S.I. 3) The S.I. formula is: Interest = Principal x Rate x Time / 100. The C.I. formula for annual compounding is: Amount = Principal x (1 + Rate/100)^Time.

Uploaded by

Gautam Sai Teza
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Tips, Formulae and shortcuts for

Simple Interest and compound Interest


By

CRACKU.IN
Cracku Tip 1 S.I and C.I
Simple Interest (S.I) and Compound Interest (C.I) is one of the easiest
topics in quantitative section.

Every year, a significant number of questions appear from each of these


sections and students should aim to get all the questions right from these
topics.

The number of concepts in these topics is limited and most of the problems
can be solved by applying the formulae directly.

Many students commit silly mistakes in this topic due to complacency and
this should be avoided.

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Cracku Tip 2 S.I & C.I
In Simple Interest the principal and the Interest (occurred every period)
remains constant

In Compound Interest the Interest earned over the period is added over to
the existing principal after every compounding period. So the principal and
the Interest over a period changes after every compounding period.

For the same principal, positive rate of interest and time period (>1 year),
the compound interest on the loan is always greater than the simple
interest.

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Cracku Tip 3 S.I
The sum of principal and the interest is called Amount.

Amount (A) = Principal (P) + Interest (I)

The Simple Interest (I) occurred over a time period (T) for R% (rate of
Interest per annum),

PTR
I =
100

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Cracku Tip 4 C.I
The amount to be paid, if money is borrowed at Compound Interest
for N number of years,
R N
A=P 1+
100

The Interest occurred, I = A P

R N
I=P 1+ -P
100

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Cracku Tip 5 C.I
If R is rate of interest per year, N is number of years, P is the principal

If interest is compounded half yearly, then Amount,

R/2 2N
A=P 1+
100

If interest is compounded quarterly, then Amount,

R/4 4N
A= 1+
100

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Cracku Tip 6 S.I & C.I
If interest Rate is R1% for first year, R2% for second year and R3% for 3rd
year,
R1 R R
then the Amount, A = P (1 + ) (1 + 2 ) (1 + 3 )
100 100 100

If a difference between C.I and S.I for certain sum at same rate of interest
is given, then Principal = Difference (100/R)2

b
When interest is compounded annually but time is in fraction, let a then
c
b
R a Rc
the Amount, A = P (1+ ) (1 + )
100 100

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Cracku Tip 7 S.I & C.I

If R is the rate per annum, then present worth of Rs. K due to N years
hence is given by

K
Present worth = R N
1+100

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XAT, Bank exams, RRB, SSC and many other exams

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