Quantitative Aptitude – Simple Interest & Compound Interest (Easy Concepts & Tricks)
Interest is the extra money earned or paid on a principal amount. There are two types: Simple Interest (SI) and Compound Interest (CI).
Simple Interest (SI)
SI is calculated only on the principal amount.
Formula:
SI = (P × R × T) / 100
P = Principal
R = Rate (%)
T = Time (years)
SI Example
Question:
P = 1000, R = 10%, T = 2 years
Solution:
SI = (1000 × 10 × 2) / 100 = 200 ✔
Compound Interest (CI)
CI is calculated on principal + previous interest.
Formula:
Amount = P (1 + R/100)T
CI = Amount − Principal
CI Example
Question:
P = 1000, R = 10%, T = 2 years
Solution:
Amount = 1000 × (1.1)² = 1210
CI = 1210 − 1000 = 210 ✔
Difference Between SI & CI
- SI → only principal
- CI → principal + interest
Practice Questions
Q1: P = 2000, R = 5%, T = 2 → SI?
Q2: P = 1000, R = 10%, T = 1 → CI?
Q3: Difference between SI & CI for 2 years?
Answers
Q1: 200
Q2: 100
Q3: 10
Quick Tricks
- Use direct formula for SI
- Use (1 + R/100)T for CI
- For 2 years → CI − SI = (P × R²) / 10000
Final Tip
Practice SI and CI regularly. These are easy scoring topics in bank exams.
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