Shortcut tricks of Compound Interest

Tricks

Let principal =P
Rate =R%
Time=n years

1.If interest is compounded annually, then
               Amount=P(1+R/100)^n

Compound Interest= Amount –Principal

Compound Interest= P[(1+R/100)^n - 1]

2.If the interest is compounded half-yearly ,then R=R/2       & n=2n then
                  Amount=P(1+R/2 × 100)^2n

3.If the interest is compounded quaterly, then R=R/4 & n=4n
    then Amount=P(1+R/4  × 100)^4n

4. If interest is compounded (1+{(a/b)R }/ 100)

5.If rates of interest are R1%, R2% and R3% for 1st,2nd and 3rd year respectively,then

Amount=P(1+R1/100) (1+R2/100)( 1+R3/100)

Q. Find the compound interest on Rs 8000 at 4% p.a for 2yrs compounded annually.

Solution: Given that P=Rs 8000

R=4%

Time= 2year

Now according to the formula,

Amount= P(1+R/100)^n

= 8000(1+4/100)^2

=8000 x 26/25 x 26/25

=Rs. 8652.80

Therefore, CI=Amount – principal

=Rs.8652.80 – Rs. 8000

=Rs.652.80

Q. Ruchi invested Rs. 1600 at the rate of compound interest for 2 years. She got Rs. 1764 after the specific period. Find the rate of interest

Solution : Given that P=Rs 1600

Time= 2year

Amount= Rs 1764

Now according to the formula,

Amount= P(1+R/100)^n

1764=1600(1+R/100)^2

1760/1600 = (100+R/100)^2

441/400 = (100+R/100)^2

(21/20)^2=(100+R/100)^2

100+R/100 = 21/20

100 + R=21/20 X 100

100 + R= 105

R= 105 – 100=5%

Q. Find the compound interest on Rs5000 in 2years at 4%, if the interest being compounded half-yearly.

Solution: Given that P = Rs 5000

R=4%

Time= 2year

Now according to the formula,

Amount= P(1+R/2 x 100)^2n

= 5000(1+4/100)^4

=5000 x 51/50 x 51/50 x 51/50 x 51/50

=51 x 51 x 51 x 51 / 1250

=Rs. 5412.16

Therefore, CI=Amount – principal

=Rs.5412.16 – Rs. 5000

=Rs.412.16

Q. Find the compound interest on Rs8000 in 9months at 20%, if the interest being compounded quarterly.

Solution: Given that P = Rs 8000

R=20%

Time= 9 months = ¾ year

Now according to the formula,

Amount= P(1+R/4 x 100)^4n

= 8000(1+20/400)^(3/4 x4)

= 8000(1+5/100)^3

=8000 x 21/20 x 21/20 x 21/20

=Rs. 9261

Therefore, CI=Amount – principal

=Rs.9261 – Rs. 8000

=Rs.1261

Tricks of Discount

Tricks of True Discount and Banker's Discount

Computer awareness

Tricks of SIMPLE INTEREST

Tricks of percentage

Sports questions

JOIN OUR TELEGRAM CHANNEL