Tips Tricks And Shortcuts on Compound Interest And Simple Interest Problems

Tips and Tricks to Crack CI and SI Problems

• Compound Interest is always calculated on the Amount (Principal + Interest) .

• Simple interest is always calculated on Principal .

• If a sum of money P amounts to A₁ in n time at SI and the same sum of money amounts to A₂ in n time at CI, it can be calculate as
  \mathbf{\frac{P}{A_{1}} =\frac{A}{A_{2}} }

• A sum at a rate of interest compounded yearly becomes Rs. A₁in n years and Rs. A₂ in (t + 1) years, then P =\mathbf{A_{1}(\frac{A_{1}}{A_{2}})^t} .

• Difference between CI and SI for 2 years = \mathbf{\frac{P × (R)^2}{(100)^2}}

• Difference between CI and SI for 3 years =\mathbf{\frac{P × (R)^2}{(100)^2}×\frac{P ×  (R)^3}{(100)^3}}

• If a sum A becomes B in t₁ years at CI. Then After t₂ years, Sum = \mathbf{\frac{(B)^\frac{t_{2}}{t_{1}}}{(A)^\frac{t_{2}}{t_{1}}-1}}