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SimpleandCompoundInterest 2ndsession

1) The document discusses various questions related to simple interest and compound interest without using formulas. 2) It provides the conceptual approach to calculate simple interest, compound interest and the relationship between the two for different time periods and interest rates. 3) Various questions related to simple interest, compound interest, and the difference between simple and compound interest are solved to strengthen the conceptual understanding.

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0% found this document useful (0 votes)
201 views58 pages

SimpleandCompoundInterest 2ndsession

1) The document discusses various questions related to simple interest and compound interest without using formulas. 2) It provides the conceptual approach to calculate simple interest, compound interest and the relationship between the two for different time periods and interest rates. 3) Various questions related to simple interest, compound interest, and the difference between simple and compound interest are solved to strengthen the conceptual understanding.

Uploaded by

prachi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Arithmetic Without Formulas-

Simple & Compound Interest


(Part-2 )
By Sameer Sardana
( U.B.S. Panjab Uni.)

750+ Video Lessons On Q.A &


LR/DI For CAT
https://unacademy.com/user/sam
eersardana.ubs-5752
Course Objective-
➢ Concept Development of Simple Interest and
Compound Interest
➢Without Formulas and Conceptual Shortcut Approach.
➢75+ Questions For Concept Development and To Cover
All Types
➢ Relation b/w Simple Interest and Compound Interest
➢Advance Questions of Simple Interest and Compound
Interest.
➢PYQs of Simple Interest and Compound Interest.
Relation Between Simple Interest and
Compound Interest.
Principal=1000; ROI=10%;T=3yr
Simple Interest Compound Interest

1st Year 100 100


2nd Year 100 100+10=110
3rd Year 100 100+10+10+1=121
QUE.23: The simple interest on a sum of money is Rs.1200 in 3
years at 5% simple rate of interest. Find the Compound Interest
on the same sum of money at the same rate of interest and time
period.
.
ROI=5%;T=3yr
Simple Interest Compound Interest

1st Year 400 400


2nd Year 400 400+20=420
3rd Year 400 400+20+20+1=441

Total 1200 1261


QUE.24: The simple interest on a sum of money is Rs.1500 in 3
years at 5% simple rate of interest. Find the Compound Interest
on the same sum of money at the same rate of interest and time
period.

ROI=5%;T=3yr
Simple Interest Compound Interest

1st Year 500 500


2nd Year 500 500+25=525
3rd Year 500 500+25+25+1.25=551.25

Total 1500 1576.25


QUE.25: Find the Compound Interest If a 4000 is invested at 20%
p.a. for 3 years ?

\
QUE.25: Find the Compound Interest If a 4000 is invested at 20%
p.a. for 3 years ?

Principal =4000; ROI=20%; T=3yr

Compound Interest Direct Method using


ratio of 3:3:1

1st Year 800 800 : 160 : 32


2nd Year 800+160=960 3 : 3 : 1
3rd Year 800+160+160+32=1152 2400 + 480 +32

Total 2912 =2912


QUE.26: Find the difference between SI and CI If Rs 8000 is invested at
10% p.a. for 3 years ?
Compound Interest as a case of successive percentage increment.

Principal=P, ROI=20% p.a.


Alternate method.
C.I Use of multiplying factor
for Successive %age increment

1st Year 20% Amount after 1st year= P*1.2


2nd Year 20%+4% Amount after 2nd year=P*1.2*1.2=P*1.44
3rd Year 20%+4%+4%+.8% Amount after 3rd year=P*1.2*1.2*1.2=1.728
Total 72.8% Interest=72.8%

For 4th year you can take 20% of 72.8% and add it to 72.8% to know the
total interest after 4 years i.e. 72.8%+14.56%= 86.64%
Amount after 4th year= P*186.64
QUE.29:A sum of money amounts to 5070 in 2 years at compounded rate
of interest of 30%. Find the sum of money ?

A sum of money
ao
QUE.29:A sum of money amounts to 5070 in 2 years at compounded rate
of interest of 30%. Find the sum of money ?

Principal=P, ROI=20% p.a.

C.I A sum of money Alternate method.


Use of multiplying factor
for Successive %age increment

1st Year
2nd Year
30%ao
30%+9%
Amount after 1st year= P*1.3
Amount after 2nd year=P*1.3*1.3=P*1.69
Total 69%

P*1.69 = 5070
P= 5070/1.69 = 3,000/-
QUE.30:A sum of money amounts to 10976 in 3 years at compounded rate
of interest of 40%. Find the sum of money ?
QUE.30:A sum of money amounts to 10976 in 3 years at compounded rate
of interest of 40%. Find the sum of money ?

Principal=P, ROI=40% p.a.

C.I Use of multiplying factor


for Successive %age increment
1st Year 40% Amount after 1st year= P*1.4
2nd Year 40%+16% Amount after 2nd year=P*1.4*1.4=P*1.96
3rd Year 40%+16%+16%+6.4% Amount after 3rd year =
P*1.4*1.4*1.4=P*2.744
Total Interest= 174.4%

P*2.744=10976 ; P=4000/-
QUE.31:A sum of money amounts to 2 times of itself in 3 years at
compounded rate of interest . In how many year will it become 8 times of
itself ?
QUE.31:A sum of money amounts to 2 times of itself in 3 years at
compounded rate of interest . In how many year will it become 8 times of
itself ?

Principal= P

P 3 year 2P 3 year 4P 3 year 8P


QUE.32:A sum of money amounts to 4 times of itself in 5 years at
compounded rate of interest . In how many year will it become 64 times
of itself ?
QUE.32:A sum of money amounts to 4 times of itself in 5 years at
compounded rate of interest . In how many year will it become 64 times
of itself ?

Principal= P

P 5 year 4P 5 year 16P 5 year 64P


QUE.33: A sum of money amounts to 2.197 times of itself in 3 years at
compounded rate of interest . Find the rate of interest?
QUE.33: A sum of money amounts to 2.197 times of itself in 3 years at
compounded rate of interest . Find the rate of interest?

Principal= P

P 3 year 2.197 P

P 1 Year 1.3 P

Rate of interest =30%


QUE.35: A sum of money amounts to 3.375 times of itself in 3 years at
compounded rate of interest . Find the rate of interest?

Principal= P
QUE.35: A sum of money amounts to 3.375 times of itself in 3 years at
compounded rate of interest . Find the rate of interest?

Principal= P

P 3 year 3.375 P

P 1 Year 1.5 P

Rate of Interest= 50%


QUE.35: A sum of money amounts to 3.375 times of itself in 3 years at
compounded rate of interest . Find the rate of interest?

Principal= P

P 3 year 3.375 P

P 1 Year 1.5 P

Rate of Interest= 50%


QUE.36: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
20% rate of interest is Rs.80, then find the Principal ?
QUE.36: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
20% rate of interest is Rs.80, then find the Principal ?

Alternate method.
S.I. C.I Use of multiplying factor
for Successive %age increment

1st Year 20% 20% Amount= P*1.2*1.2


2nd Year 20% 20%+4% =P*1.44

4% of what value is 80 ? 80
*100 = 2000
4
QUE.37: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
30% rate of interest is Rs.72, then find the Principal ?
QUE.37: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
30% rate of interest is Rs.72, then find the Principal ?

Alternate method.
S.I. C.I Use of multiplying factor
for Successive %age increment

1st Year 30% 30% Amount= P*1.3*1.3


2nd Year 30% 30%+9% =P*1.69
i.e. increment or Total Interest= 69%

9% of what value is 900 ? 72


*100 = 800
9
QUE.38: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
8.33 % rate of interest is Rs.12, then find the Principal ?
QUE.38: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
8.33 % rate of interest is Rs.12, then find the Principal ?

Alternate Method.
S.I. C.I Let, Principal = 144
S.I. C.I

1st Year P(1/12) P(1/12) 12 12


2nd Year P(1/12) P(1/12) + P(1/144) 12 12+1

If Difference is 1, P=144
1 If Difference is 12, P=144*12
* P = 12
144 =1728
P = 1728
QUE.39: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
7.7 % rate of interest is Rs.8 , then find the Principal ?
QUE.39: If the difference b/w S.I. and C.I. on a sum of money in 2 year at
7.7 % rate of interest is Rs.8 , then find the Principal ?

Alternate Method.
S.I. C.I Let, Principal = 169
S.I. C.I

1st Year P(1/13) P(1/13) 13 13


2nd Year P(1/13) P(1/13) + P(1/169) 13 13+1

If Difference is 1, P=169
1 If Difference is 8, P=169*8
*P = 8
169 =1352
P = 169 * 8 = 1352
QUE.40: If the difference b/w S.I. and C.I. on a sum of money in 3 year at 10% rate of
interest is Rs. 248., then find the Principal ?
QUE.40: If the difference b/w S.I. and C.I. on a sum of money in 3 year at 10% rate of
interest is Rs. 248., then find the Principal ?

Alternate method. Direct Method using


S.I. C.I Use of multiplying factor 3:3:1
Of Successive %age
increment 10% : 1% : 0.1%
3 : 3 : 1
1st Year 10% 10% Amount= P*1.1*1.1*1.1 30%+3%+0.1%=33.1%
2nd Year 10% 10%+1% =P*1.331
3rd Year 10% 10%+1%+1%+0.1% Total interest=33.1%

3.1% of what value is 248 ? 3.1


* P = 248
100
P = 8000
QUE.41: If the difference b/w S.I. and C.I. on a sum of money in 3 year at 20% rate of
interest is Rs. 2560., then find the Principal ?
QUE.41: If the difference b/w S.I. and C.I. on a sum of money in 3 year at 20% rate of
interest is Rs. 2560., then find the Principal ?

Alternate method. Direct Method using


S.I. C.I Use of multiplying factor 3:3:1
Of Successive %age
increment 20% : 4% : 0.8%
3 : 3 : 1
1st Year 20% 20% Amount= P*1.2*1.2*1.2 60%+12%+0.8%=72.8%
2nd Year 20% 20%+4% =P*1.728
3rd Year 20% 20%+4%+4%+0.8% Total interest=72.8%

12.8
12.8% of what value is 2560 ? * P = 2560
100
P = 20000
QUE.42: Find the difference b/w S.I. and C.I. on a sum of money in 3 year at 16.67% rate of
interest if it is given that the 3rd Year C.I. is Rs. 147. Also, find the Principal ?
QUE.42: Find the difference b/w S.I. and C.I. on a sum of money in 3 year at 16.67% rate of
interest if it is given that the 3rd Year C.I. is Rs. 147. Also, find the Principal ?

Alternate method. Direct Method using


S.I. C.I 3:3:1
Let,P=216
S.I C.I 1/6 : 1/36 : 1/216
3 : 3 : 1
1st Year P(1/6) P(1/6) 36 36 Difference= 1/12+1/216
2nd Year P(1/6) P(1/6) +P(1/36) 36 36+6 =19/216
3rd Year P(1/6) P(1/6)+P(1/36)+ P(1/36) 36 36+6+6+1 i.e. 648*19/216=57
+P(1/216)
=P(49/216)
If 3rd year C.I.= 49, P=216
49 If 3rd Year C.I=147,P=648
* P = 147
216
Difference b/w S.I. and C.I.
P = 648 =19*3=57
QUE.45: Find the difference b/w S.I. and C.I. on a sum of money in 3 year if the rate of interest
is 16.67% in first year, 8.33% in 2nd year and 16.67% in 3rd year and if it is given that the sum
of 2nd and 3rd Year C.I. is Rs. 532. Also, find the Principal ?
QUE.45: if the rate of interest is 16.67% in first year, 8.33% in 2nd year and 16.67% in 3rd year
and if it is given that the sum of 2nd and 3rd Year C.I. is Rs. 532. then find the difference b/w
S.I. and C.I. on a sum of money in 3 years. Also, find the Principal ?

Alternate method.
S.I. C.I
Let, P=432
S.I C.I

1st Year P(1/6) P(1/6) 72 72


2nd Year P(1/12) P(1/12) +P(1/72) 36 36+6
3rd Year P(1/6) P(1/6)+P(1/36)+ P(1/72) 72 72+12+6+1
+P(1/432)

133 If 2nd year+3rd year C.I.= 133, P=432


* P = 532 If 2nd year+3rd year C.I.= 532, P=1728
432 Difference b/w S.I. and C.I.
P = 1728 =25*4=100
QUE.46: If difference b/w the 2nd and 3rd year C.I. on a sum of money is 768 then find the
Principal and also find the difference between S.I. and C.I. Of three year if the rate of interest is
6.67% in the first year, 8.33% in the second year and 20 % in the third year?
QUE.46: Given that the rate of interest is 6.67% in the first year, 8.33% in the second year and
20 % in the third year and the difference b/w the 2nd and 3rd year C.I. on a sum of money is
768 then find the Principal and also find the difference between S.I. and C.I. in three years.
Alternate method.
S.I. C.I
Let, P=900
S.I C.I

1st Year P(1/15) P(1/15) 60 60


2nd Year P(1/12) P(1/12) +P(1/180) 75 75+5
3rd Year P(1/5) P(1/5)+P(1/75)+ P(1/60) 180 180+12+15+1
+P(1/900)

If 3rd year-2nd year C.I.= 128, P=900


128 If 3rd year-2nd year C.I.= 768, P=5400
* P = 768 Difference b/w S.I. and C.I.
900 =36*6=216
P = 5400
QUE.47. If Rs. 8000 invested at compounded rate of interest amounts to 9261 in 3years. Find
the p.a. rate of interest.?

Concept
8000 3years 9261
P=8000; ROI=5%;
If Time=3year
20 1 year 21 Amount =8000*1.05*1.05*1.05

=8000(1.05)3
If time =5 year
1
= 5% Amount=8000(1.05)5
20
Take nth root to know the ROI Per annum
QUE.48. If a sum of money invested at compounded rate of interest amounts to 1.4641 times
of itself in 4 years. Find the rate of interest ?
QUE.47. If a sum of money invested at compounded rate of interest amounts to 1.4641 times
of itself in 4 years. Find the rate of interest ?

Concept
P 4years 1.4641P
P=8000; ROI=5%;
If Time=3year
P 1 year 1.1 Amount =8000*1.05*1.05*1.05

10% =8000(1.05)3
If time =5 year
Amount=8000(1.05)5

Take nth root to know the ROI Per annum


QUE.48. A, B & C borrow Rs. 33700 in all at 10% SI & and pay back equal sum in full
settlement of their respective loans after 4, 5 & 6 yrs respectively. Find the sum borrowed by B.
QUE.48: A, B & C borrow Rs. 33700 in all at 10% SI & and pay back equal sum in full
settlement of their respective loans after 4, 5 & 6 yrs respectively. Find the sum borrowed by B.

Pa 4years @10% 1.4 Pa Pa : Pb : Pc

1/14 : 1/15 : 1/16

Pb 5 years @ 10% 1.5 Pb 15*16 : 14*16 : 14*15


120 : 112 : 105 337
Pc 6 years @10 % 1.6 Pc 12000 : 11200 : 10500 33700

1.4 Pa = 1.5 Pb = 1.6 Pc


QUE.49: What annual installment will discharge a loan of Rs. 6120 due after 6 yrs, rate of
interest been 11% p.a. simple interest ?
QUE.49: What annual installment will discharge a loan of Rs. 6120 due after 6 yrs, rate of
interest been 11% p.a. simple interest ?
Concept-

Installment paid after 1 year + Interest added for 5 years = Amount at the end of 6 year

First Installment( I ) + 55 % of I = 1.55 I

Installment paid after 2 year + Interest added for 4 years =Amount at the end of 6 year

Second Installment( I ) + 44 % of I = 1.44 I

Installment paid after 3 year + Interest added for 3 years = Amount at the end of 6 year

Third Installment( I ) + 33% of I = 1.33 I

And so on
QUE.49 What annual installment will discharge a loan of Rs. 6120 due after 6 yrs, rate of
interest been 11% p.a. simple interest ?

1.55 (I) + 1.44 (I)+ 1.33 (I)+ 1.22 (I)+ 1.11 (I)+ (I) =6120

7.65 (I) =6120

I= 6120/7.65

I=800
QUE.49: What annual installment will discharge a loan of Rs. 6120 due after 6 yrs, rate of
interest been 11% p.a. simple interest ?

The 1st installment is paid 5 yrs in advance, the 2nd 4 yrs in advance and so on the last
installment is paid on the day the whole sum was supposed to be paid.

Therefore if u assume the installment to be Rs. 100, then @ 11% the interest is to be
charged for 5 + 4 + 3 + 2 + 1 = 15 yrs.

The interest will become 100 × 15 × 11/100 = Rs. 165.

The total sum paid in 6 yrs will be 100 × 6 = 600.


The loan that will be over is 600 + 165 = Rs. 765.

Now apply the chain rule, for 765 the installment is Rs. 100
For 6120 the installment will be how much - 6120 × 100/765 = Rs. 800, which is the
answer.
Que.50: Three equal installments, each of Rs. 648, were paid at the end of the year on
a sum borrowed at 20% compounded annually. Find the sum
Que.50: Three equal installments, each of Rs. 648, were paid at the end of the year on
a sum borrowed at 20% compounded annually. Find the sum

Concept-

Principal value of the first installment = 648*5/6

Principal value of the second Installment= 648*5/6*5/6

Principal Value of the third Installment= 648*5/6*5/6*5/6

Total Sum= 648*5/6 + 648*25/36 + 648*125/216

= 1365
Que.51: A loan of Rs. 17100 is repaid in 3 annual installments. The 1st
installment is half of the 2nd and one-third of the 3rd. If the interest be 20% p.a.
compounded annually, find the largest of the payments (FMS).

Concept-

Principal=P; ROI= 20% ; T= 3years

Amount= P*1.2*1.2*1.2

P= Amount/(1.2)3
Que.51: A loan of Rs. 17100 is repaid in 3 annual installments. The 1st
installment is half of the 2nd and one-third of the 3rd. If the interest be 20% p.a.
compounded annually, find the largest of the payments (FMS).

Let the 1st installment be x


the 2nd installment will be 2x
the third installment will be 3x.

Now take the principal values of all the three installments.

Principal value of the first installment = x/1.2

Principal value of the second Installment= 2x/(1.2)2

Principal Value of the third Installment= 3x/(1.2)3


Que.51: A loan of Rs. 17100 is repaid in 3 annual installments. The 1st
installment is half of the 2nd and one-third of the 3rd. If the interest be 20% p.a.
compounded annually, find the largest of the payments (FMS).

x/1.2 + 2x/(1.2)2 + 3x/(1.2)3 = 17100

Solve & get x = Rs. 4320.

The highest installment will be 3x i.e. 4320 × 3 = 12960.


Que.52: The ratio of amount receivable after two years, when the same
sum of money is kept at the same rate of interest, but one at SI and
other at CI is 80:81. Find the rate of interest.

A.2.5% B.1.25%
C.12.5% D.6.25%
Que.52: The ratio of amount receivable after two years, when the same
sum of money is kept at the same rate of interest, but one at SI and
other at CI is 80:81. Find the rate of interest.

A.2.5% B.1.25%
C.12.5% D.6.25%
21 41
P* P*
20
Option A- 41 41 Option B- 40
P* * 81 81
40 40 P* *
80 80

5
P*
80
Option C- 4 =
9 9 81
P* *
8 8

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