Dear Students, Compound Interest Chapter is an Integral part of any competitive exam syllabus whether it is SSC CGL, CHSL, IBPS, SBI, PO or any other online competitive exam. The number of questions from Compound Interest may vary from exam to exam. For e.g: In SSC CGL the number of questions from CI (Compound Interest) can be 2-3 in Tier 1 and 3-5 in Tier 2 Whereas in online bank exams like IBPS, SBI PO/Clerk the number of Questions remain 1-2.
In this article, I'll answer all your queries on CI Such as What is compound interest? How to calculate compound interest? What are the compound Interest formulas?
Through this article, I'll teach you all the short-cut methods that you can use in your online SSC exam or any other competitive bank exam.
To understand the concept of Compound Interest you need to have completed the Percentage Chapter.
The Prime difference between the Simple Interest(SI) and Compound Interest(CI) is that, the Compound Interest is charged on Interest.
Compound Interest जिसे हम चक्रवर्ती ब्याज के रूप में à¤ी जानते हैं |
Formulae for Compound Interest
Till date, we have solved the questions of compound interest by using the above formulas or by simply calculating the Simple Interest for 1st year and then add it to the principal to get the amount which becomes the principal for the next year. This process continues until the time we get the CI for the asked number of years. The calculation in this process consumes to much time which can be a disaster for students preparing for Government competitive exams.
In competitive exams, Time is very precious so we will use different time saving short-cut methods to solve compound interest questions.
These fraction values will not only help you in the Chapter of Compound interest but also in Simple Interest, Percentage, Discounts, etc.
Below are some of the Percentage fraction Values that you need to memorize for fast calculations:-
Values from this fraction chart should be on your fingertips to speed up your calculation process. Don't worry, Just keep on practicing and solving CI, SI & Percentage questions using these values and you'll be able to easily memorize it.
You can download this percentage fraction Chart just by clicking on the image. Take a print out and paste it in your room near your bed. It will help you a lot in daily revision.
While going through the questions in CI you'll see questions in which two or more rate of Interest is given for different Years. These Questions become calculative if you try to find CI year by year. With the method that I am giving providing, you'll be able to find the Effective Rate of CI for two or three year together.
Example:
Suresh borrows Rs. 10,000/- at 4% for the first year, 5% for the second year. What is the amount to be paid after second year?
Solution:
This method is one of the fastest method by which you can easily find out over all rate of CI
Now lets go further for finding the CI for more then 2 years.
Q. Suresh borrows Rs. 10,000/- at 4% for the first year, 5% for the second year, 6% for the third year. What is the amount to be paid after third year?
Solutions:
With this method, you will take not more than 5 seconds to solve any CI question. After doing practice with this method you'll be able to do all the calculations in your mind. And the Process of finding the Effective CI Rate will be much faster.
Through this article, I'll teach you all the short-cut methods that you can use in your online SSC exam or any other competitive bank exam.
To understand the concept of Compound Interest you need to have completed the Percentage Chapter.
What is Compound Interest?
The term Compound Interest is generally used in the concept of money lending. Money is said to be lent at CI when at the end of the year or other fixed periods the interest that has become due is not paid to the lender but is added to the sum lent, and the amount thus obtained became the principal for the next period. The process is repeated until the amount for the last period has been found. The difference between the original principal and the final amount is called Compound Interest (CI).The Prime difference between the Simple Interest(SI) and Compound Interest(CI) is that, the Compound Interest is charged on Interest.
Compound Interest जिसे हम चक्रवर्ती ब्याज के रूप में à¤ी जानते हैं |
Formulae for Compound Interest
Till date, we have solved the questions of compound interest by using the above formulas or by simply calculating the Simple Interest for 1st year and then add it to the principal to get the amount which becomes the principal for the next year. This process continues until the time we get the CI for the asked number of years. The calculation in this process consumes to much time which can be a disaster for students preparing for Government competitive exams.
In competitive exams, Time is very precious so we will use different time saving short-cut methods to solve compound interest questions.
Lesson 1
First and foremost, we need to make sure that you learn the Percentage fraction values to reduce the time taken by you to solve the CI question.
As we know that 10%= (10/100)
But You need to learn the direct fraction value of the given percentage to solve the question fast.
Below are some of the Percentage fraction Values that you need to memorize for fast calculations:-
Percentage Fraction Value Chart
You can download this percentage fraction Chart just by clicking on the image. Take a print out and paste it in your room near your bed. It will help you a lot in daily revision.
While going through the questions in CI you'll see questions in which two or more rate of Interest is given for different Years. These Questions become calculative if you try to find CI year by year. With the method that I am giving providing, you'll be able to find the Effective Rate of CI for two or three year together.
Suresh borrows Rs. 10,000/- at 4% for the first year, 5% for the second year. What is the amount to be paid after second year?
Solution:
This method is one of the fastest method by which you can easily find out over all rate of CI
Now lets go further for finding the CI for more then 2 years.
Q. Suresh borrows Rs. 10,000/- at 4% for the first year, 5% for the second year, 6% for the third year. What is the amount to be paid after third year?
Solutions:
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