Concept And Short trick on Compound Interest With Quiz

Compound
Interest:
When compound interest is applied, interest
is paid on both the original principal and on earned interest. If you make a
deposit into a bank account that pays compounded interest, you will receive
interest payments on the original amount that you deposited,

as well as
additional interest payments. This allows your investment to grow even more
than if you were paid only simple interest.


IMPORTANT
TRICKS:
1. ONE YEAR OF SIMPLE INTEREST = ONE YEAR OF
COMPOUND INTEREST.

2. THE AMOUNT AT THE END OF FIRST YEAR (OR
PERIOD) WILL BECOME THE PRINCIPAL FOR THE SECOND YEAR(OR PERIOD) AND AMOUNT AT
THE END OF SECOND YEAR (OR PERIOD) BECOMES THE PRINCIPAL FOR THIRD YEAR.
AMOUNT = PRINCIPAL + INTEREST


A=P(1+R/100)n

Where, A=Amount
P=principal
R =Rate percentage
n=number of years


For two
years-

(1).CI/SI=(200+r)/200

(2).Difference between CI & SI =PR2/1002

For Three
years-
 Difference between CI & SI =PR2(300+R)/1003

If lent money is Rs.
P and each instalments is Rs. R, then

P = x/(1+r/100) + x/(1+r/100)^2 +     x / (1+r/100)^3 + ….


Important Question on Compound Interest:
1.  The simple and compound interests on a sum of money for two years
are Rs 2880 and Rs 3052.80 respectively. The Rate of interest per annum is..
(1) 10%                                
(2)12%                              
(3)15%                                 
(4)18%             
   
2.  What annual instalment would clear a debt of Rs 4.24 lakhs in two
years at the rate of 12% p.a. compound interest if interest is paid at end of
year.
(1) 250880                        
(2)276440         
(3)284220                          
(4)292660

3.  Find the
annual payment that will discharge a debt of Rs 15260 due in 4 years at 6% per
annum simple interest( assume that each annual payment is made at the end of
the year.)
(1) 3600                              
(2)3500              
(3)3450                               
(4)3400

4.   A person took a loan of Rs 6000 for 3 years, at 5% per annum
compound interest. He repaid Rs 2100 in each of the first 2 years.The amount he
should pay at the end of third year to clear all his debts is.
(1) 2425.5                          
(2)2552.5           
(3)2635.5                            
(4)2745.5

5.   If the difference between simple interest and compound interest on
a certain sum of money for 3 years at 10% per annum is Rs 31, The sum is.
(1) 500                                 
(2)750 
(3)1000                               
(4)1250
Answers with Explanation:

1.      
(2) Since,
CI/SI = (200+R)/200
                3052.8/2880
= (1+R/200)
                R = 12%
2.      
(1) 4.24
x 100000 = x/ (1+r/100) + x / (1+r/100)^2
                =
x/(1+12/100) + x/(1+12/100)^2
                =
25x/28 + 252 x/282 = 1325x/784
                X =
250880
3.      
(2) Let
annual payment 100 Rs.
                100
+(100+R) + (100 +2*R) + (100 +3*R) = 15260
                100+
106 + 112 + 118 = 15260
                436 =
15260
                100 =
15260×100 / 436 = 3500
4.      
(1)  P
= 6000
                For 1sr
year CI = 5% of 6000 = 300
                Amount
= 6000 + 300 = 6300
                P for 2nd
year = 63000 – 2100 = 4200
                CI for
2nd year = 5% of 4200 = 210
                Amount
2nd year = 4200 + 210 = 4410
                P for 3rd
year = 4410 – 2100 = 2310
                CI for
3rd year = 5% of 2310 = 115.5
                Required
amount = 2310 + 115.5 = 2425.5
5.      
(3) Since
difference = PR2 (300+R)
                31 = Px102
(300+10)/ 1003


                P =
1000 

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29 Comments

  1. Is there any mail adress or contact no .of cgl helpline .I wrongly filled the form so I need help

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