Bank Exam Speed Maths

Page 12: Compound Interest (Shortcut Methods)

1. Basic Concept

Compound Interest (CI): Interest on Principal + Previous Interest

Amount Formula:
A = P × (1 + R/100)^T

CI = A - P

2. Example

P = 1000, R = 10%, T = 2 years

Year 1 = 1000 × 1.1 = 1100

Year 2 = 1100 × 1.1 = 1210

CI = 1210 - 1000 = 210

3. Shortcut for 2 Years

CI = P × (2R/100 + R²/10000)

Example:
P = 1000, R = 10%
CI = 1000 × (20/100 + 100/10000)
= 1000 × (0.2 + 0.01) = 210

4. Difference Between SI & CI

For 2 years:

Difference = P × (R/100)²

Example:
P = 1000, R = 10%
Difference = 1000 × (0.1)² = 10

5. Growth Shortcut

Each year multiply by (1 + R/100)

Example:
P = 2000, R = 5%, T = 2
= 2000 × 1.05 × 1.05

6. Important Tips

• Use shortcut for 2-year questions

• CI grows faster than SI

• Avoid full formula when possible

7. Practice Questions

1. P = 1000, R = 10%, T = 2 → CI?

2. P = 2000, R = 5%, T = 2 → Amount?

3. Difference between SI & CI (2 yrs, 10%)?

4. P = 1500, R = 8%, T = 2 → CI?

5. Growth of 1000 at 10% for 2 years?