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As per the IBPS RRB- IX 2020 Notification, RRB Clerk Prelims will be held in the month of September/ October 2020. Banking aspirants will be getting ready with the preparation of RRB Clerk Prelims exam which has only 2 sections: Numerical Ability & Reasoning. There are 40 questions of each section in the Prelims exam and the total time allowed is 45 minutes. It’s important that you clear sectional cut-offs of both the sections as well as the overall cut-off. To help you with your preparation, we have come up with a detailed PDF on simple/ compound interest tricks.

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These tricks will definitely help you score more in the numerical ability section. We are also providing you with Model Questions for practice. Try these tricks on these questions and practice a lot of other questions so that you can answer simple/ compound interest questions quickly and with accuracy. Also, practice simple/ compound interest questions in the PM app where numerical ability quizzes are uploaded on a regular basis. Let’s now have a look at the concept of simple interest.

If you have a savings account in a bank, you must be familiar with the concept of interest. You deposit money in a bank and the bank after a certain period of holding the money gives you the interest. Similarly, when a person X borrows some money from Y, X has to return the money (with some additional money) to Y. This additional money is called interest and the money which is borrowed is called Principal or Sum. Amount is the Principal and Interest together and the period for which X has borrowed the money is called Time. The Rate of Interest is the amount paid every year on Rs 100 as interest.

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When the interest on a sum borrowed for a certain period is reckoned uniformly, the interest is called simple interest. The formula of Simple Interest is below:

SI = (P*R*T)/100

P + SI = A

Where SI = Simple Interest, P = Principle, R = Rate of Interest, T = Time & A = Amount

Now that you are aware of the concept of Simple Interest, let’s have a look at some quick formulae:

Simple Interest Tricks

  • If the sum becomes S1 in T years and S2 in T + 1 years, the below formulae will apply
    I =Β  S2 – S1
  • If Principal is given in 2 parts, 1st part is given for R1 for T1 years and 2nd part is given for R2 for T2 years and their interests are same, the part 1 amount is
    Part 1 Amount =Β  (P*T2*R2)/[(T1*R1)+(T2*R2)]
  • If the rate of interest is R1% per annum for the first T1 years, R2% per annum for the next T2 years and R3% per annum for the next years beyond the first (T1 + T2) years. If the interest obtained in T3 years is Rs I.
    P = (I * 100) / [ (R1*T1)+( R2*T2 ) + ( R3*(T3-T2-T1 ) ]
  • If a sum of money becomes X times in T years at simple interest, the rate of interest R will be
    R = 100(X-1)/T
  • If P is split into two parts and simple interest is I. 1st part is given for R1 for T1 years and 2nd part is given for R2 for T2 years, the formula for the 1st part amount is
    1st part amount = [(I*100)-(P*T2*R2)]/[(T1*R1)-(T2*R2)]
  • In case R1 falls to R2 and income is diminished by D, the formula of principal will be
    P = (D*100)/(R1-R2)
  • If the sum becomes S1 in T1 years and S2 in T2 years, the rate of interest will be
    Rate of Interest =[(S2-S1)*100]/[[(T2-T1)*S1-T1*(S2-S1)]*T1]
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Compound Interest Tricks

Please note the below legends used in the formulae & tricks:

A = future value

P = principal amount (initial investment)

r = annual nominal interest rate

n = number of times the interest is compounded per year

t = number of years for which the money is borrowed

  • A sum of money placed at compound interest becomes x time in β€˜a’ years and y times in β€˜b’ years. These two sums can be related by the following formula: (x)^(1/a) = (y)^(1/b)
  • If an amount of money grows up to Rs x in t years and up to Rs y in (t+1) years on compound interest, then R% = [(y-x)/x]*100
  • A sum at a rate of interest compounded yearly becomes Rs. A1 in n years and Rs. A2 in (n + 1) years, then P = A1(A1/A2)^n
  • If a certain sum becomes x times of itself in t years, the rate of compound interest will be equal to r = 100[(x)^(1/t) – 1]
  • If the compound interest on a certain sum for 2 years is CI and simple interest for two years is SI, then rate of interest per annum is r% = 2[(CI-SI)SI]*100
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πŸ“₯ Free PDF- Simple/Compound Interest Tricks & Model Questions


Simple/ Compound Interest Model Questions for Practice

1. A certain sum of money invested at 20% per annum for 2 years compounded annually, but if interest would have been compounded half yearly on the same amount, then Rs. 241 more interest would have been received. Find the sum of money invested.

a. Rs. 10000

b. Rs. 8000

c. Rs. 12000

d. Rs. 7500

e. Rs. 10500

Answer: For Detailed Solution, Download the Free PDF

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2. The difference between compound interest and simple interest at rate of 8% per annum for 2 years is Rs. 96. Find the simple interest obtained on same amount for a period of 2 years at rate of 10% per annum.

a. Rs. 2000

b. Rs. 3200

c. Rs. 3500

d. Rs. 3000

e. Rs. 2500

Answer: For Detailed Solution, Download the Free PDF

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3. A man deposited Rs. β€˜x + 600’ at 12% per annum simple interest and earned Rs. 528 as interest after 2 years. Find the interest earned by him if he deposited Rs. 2x at 10% per annum for 2 years at compound interest.  

a. Rs. 620

b. Rs. 636

c. Rs. 650

d. Rs. 672

e. Rs. 612

Answer: For Detailed Solution, Download the Free PDF

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4. A man invested some amount which becomes Rs. 5000 in 5 years and Rs. 5600 in 8 years at certain rate of simple interest. Find the rate of interest (p.a.) at which the amount is invested.

a. 5% per annum

b. 15% per annum

c. 10% per annum

d. 20% per annum

e. 12% per annum

Answer: For Detailed Solution, Download the Free PDF

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5. Vishal invested Rs. 960 in two schemes A and B in the respective ratio of 5:3. Scheme A and B are offering simple interest at the rate of 8% per annum and 10% per annum, respectively. Find the interest obtained after 2 years from scheme A.

a. Rs. 74

b. Rs. 82

c. Rs. 96

d. Rs. 104

e. Rs. 90

Answer: For Detailed Solution, Download the Free PDF

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6. Sumit earned an interest of Rs. 774 on principal amount of Rs. 2400 at some rate of compound interest in 2 years. How much more/less interest would he have earned on Rs. 2800 at the same rate of simple interest for the same duration?

a. Rs. 80

b. Rs. 76

c. Rs. 62

d. Rs. 66

e. Rs. 70

Answer: For Detailed Solution, Download the Free PDF

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7. In 8 years, a sum of money earns an interest equal to twice the sum invested at simple interest. In how many years the sum of money becomes 800% of itself at the same rate of simple interest?

a. 26 years

b. 32 years

c. 30 years

d. 24 years

e. 28 years

Answer: For Detailed Solution, Download the Free PDF

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8. A man deposited 30% of his salary to a bank which offers compound interest at the rate of 10% p.a. If the interest earned by him from the bank after 2 years is Rs. 3780, find the monthly expenditure of the man which is 52% of his monthly salary.

a. Rs. 31200

b. Rs. 32400

c. Rs. 28400

d. Rs. 26200

e. Rs. 34400

Answer: For Detailed Solution, Download the Free PDF

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9. A man deposited Rs. 8000 at 10% compound interest, compounded annually while Rs. 7500 at 13% simple interest per annum. What will be the difference between the compound interest and the simple interest earned by him after 3 years?

a. Rs. 272

b. Rs. 282

c. Rs. 277

d. Rs. 290

e. Rs. 240

Answer: For Detailed Solution, Download the Free PDF

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10. Vinit invested Rs. (x + 200) at 12% simple interest per annum for 4 years and Rs. (x + 600) at 9% simple interest per annum for 3 years. If the difference between the interest obtained by both was Rs. 270, then find the average of the two amounts invested by Vinit?

a. Rs. 3200

b. Rs. 2000

c. Rs. 3000

d. Rs. 2500

e. Rs. 3800

Answer: For Detailed Solution, Download the Free PDF

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πŸ“₯ Free PDF- Simple/Compound Interest Tricks & Model Questions


We hope that the above PDF will be helpful in your preparation.

 

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