## Aptitude Compound Interest Concepts and Formulas## Points to remember:1) 2) In case of compound interest, when interest is compounded annually, the amount is given by: Amount (A) = P 1 + Where, P= Principal r = Rate of interest t = time/number of years And, Compound Interest = Amount (A) - Principal (P) Compound Interest (C.I) = P1 + = P1 + And, Rate of interest (r) = 3) Compound interest can be compounded half-yearly and quarterly, etc. Accordingly, the formula varies; - When interest is compounded half-yearly:
Amount (A) = P 1 + Compound Interest (C.I.)=P 1 + And, Rate of interest (r) = 2 ∗ 100 ∗ 2 - 1 % p.a. 4) When interest is compounded quarterly: Amount (A) = P 1 + Compound Interest (C.I.) = P 1 + And, Rate of interest (r) = 4 ∗ 100 ∗ 4 - 1 % p.a. 5) When interest is compounded annually but time is in fraction i.e. 3 years, then; Amount = P 1 +3*1 + So, in general, if the interest is compounded n times a year; Amount (A) = P 1 + Compound interest (CI): P 1 + And, Rate of interest (r) = n ∗ 100 ∗ n - 1 % p.a. 6) When there are different rates of interest for different years e.g. r1%, r2%, r3% for 1 Amount = P 1 + 1 + 1 + ## Some quicker methods:1) If a sum becomes P times in t years, the rate of compound interest r is = 100 [(P) 2) If C.I. is given, we can find the S.I. by the formula; Simple Interest = ∗ Compound interest 3) If C.I. and S.I. are given in the question, we can find the rate of interest by the formula; Rate of interest = 2 ∗ ∗ 100 4) If the difference between the C.I. and S.I. on a certain sum of money for 2 years at r% is Rs. X, the sum is given by; Sum = X 5) If the difference between C.I. and S.I. on a certain sum for 3 years at r% is Rs. X, the sum is given by; Sum = 6) If a certain sum of money grows to Rs. X in n years and Rs. Y in (n+1) years, the rate of interest is given by; Rate of interest: 7) If a sum of money X becomes Y in t Rs. 8) If a loan of Rs. X at r% rate of interest C.I. is to be paid back in n equal yearly installments, the value of each installment is given by; = Compound Interes Aptitude Test Paper 1 Compound Interes Aptitude Test Paper 2 Next TopicAptitude Compound Interest |