Aptitude - Compound Interest - Discussion

6. 

What will be the compound interest on a sum of Rs. 25,000 after 3 years at the rate of 12 p.c.p.a.?

[A]. Rs. 9000.30
[B]. Rs. 9720
[C]. Rs. 10123.20
[D]. Rs. 10483.20
[E]. None of these

Answer: Option C

Explanation:

Amount
= Rs. 25000 x 1 + 12 3
100
= Rs. 25000 x 28 x 28 x 28
25 25 25
= Rs. 35123.20

C.I. = Rs. (35123.20 - 25000) = Rs. 10123.20


Viplov said: (Jun 19, 2010)  
Please give me a shortcut methods for competitive exams.

Dayal said: (Feb 10, 2011)  
Pl send me the short cut method for compound interest calculation specially for more than 2 years.

Deepak said: (May 18, 2011)  
Sir please send me any shortcut method for this question.

Snehal said: (Sep 8, 2011)  
What is meaning of p.c.p.a ?

Sujatha said: (Oct 31, 2011)  
What is the meaning of PCPA?

Yogendra said: (Jan 14, 2012)  
Hi, sujatha & snehal PCPA means percentage per annum

Sitam said: (Apr 3, 2012)  
Can any one know its simplest method to find out C. I.

Sugi said: (Apr 17, 2012)  
Can any one explain me how 28 /25 came?

Famitha said: (Aug 2, 2012)  
@Sugi.

28/25 is fraction if you directly divide 1+12/100 you will get 1.12.

The cube of 1.12 is 1.404928.

Selva said: (Oct 29, 2012)  
Hi friends, don't use any formulas for calculating compound interest.

Here I show a simple way for all.

Lets the principal amount be 25,000 rs here and time=3 years, rate of interest=12%. Firstly calculate the interest for 1 year==>25000*(12/100)=3000rs,

So if we want to find the compound interest in second year firstly just add the interest amount to the principal amount==>25000+3000=28000rs.

Then compound interest in 2 years=28000*(12/100)=3360rs,this is the compounded interest in 2 years..then now we just add the previous principal and interest calculated now..28000+3360=31360rs this is the principal amount now.. compounded interest in 3rd year=31360*(12/100)=3763.2rs.

So compounded interest for this amount and rate of interest after 3 years=3000+3360+3763.2=10123.20rs.

Does this concept of compound interest is understandable are not?

Suresh said: (Jan 7, 2013)  
This method help us to easily understand the sum.

Compound interest + sum of Rs.25000 = 25000 (1 + 12/100) ^3.

=25000 (28/25) ^3.

=35123.2.

We needed only for compound interest =35123.2 - sum of Rs.25000.

=35123.2 - 25000.

=10123.2.

Thanuja said: (Jun 22, 2013)  
Please send me the short cut method for compound interest calculation specially for more than 2 years.

Pulkit said: (Jan 17, 2014)  
Anybody explain how comes 28/25*28/25*28/25 ?

Ashok said: (Jul 22, 2014)  
Firstly simplify the 12/100 it will come 3/25 after that you will get 28/25.

Sreenu said: (Aug 7, 2014)  
Using percentages

Shortcut method for C.I when P, R%, time is given to find out CI:

1st year:-10% of 25000+2% of 25000=2500+250*2=2500+500 = 3000.
2nd year:-10% of 28000+2% of 28000=2800+280*2=2800+560 = 3360.
3rd year:_10% of 31360+2% of 31360=3136+313.6*2=3136+627.2 = 3763.2.

So total interest is=3000+3360+3763.2 = 10123.2.

I hope this method understand. Goodluck.

Kasinath @Hyd said: (Aug 15, 2014)  
P.C.P.A means Percentage Compound Per Annum.

Ashwini said: (Jan 13, 2015)  
I did not understand 2nd and 3rd step in explanation (28/25) how it come please send me details about this steps.

Gayathri said: (Jan 15, 2015)  
Please I want a accurate method for 28/25.

Anand Singh said: (Feb 7, 2015)  
Shortcut:

P = 25000, T = 3 years. And R = 12 pcpa, C.I = ?

C.I = 12% of 25000 = 3000.

12% of 3000 = 360.

12% of 360 = 43.20.

i.e 3(3000) + 3(360) + 43.2 = 9000+1080 +43.20 = 10123.20 (since time = 3 years).

Manoj said: (Jun 18, 2015)  
Here I got a method of solving compound interest for two years and three years.

You just need to know SQUARES and CUBES to solve them in mind, without any pen and paper.

I suppose if we know rate of interest collectively for two years or three years, it would be easy to find the interest.

So here is d simple trick to find rate of interest 2 years:

If rate of interest is given.

10% ==> 10+10+1^2 = 21.

So 21 is the rate of interest for two years collectively. @10pcpa interest.

20% ==> 20+20+2^2 = 44.
30% ==> 30+30+3^2 = 69.
12% ==> 12+12+1. 2^2= 25. 44.

Hope it's understandable.

Now for 3 years:

10% ==> 10+10+10+1^2+1^2+1^2+1^3/10.

==>30+1+1+1+1/10.
==>33+0.1=33.1.

So, @10% per annum the compounded interest for three years it will b 33.1%.

If it's 5% per annum then,

5% ==> 5+5+5+0.5^2+0.5^2+0. 5^2+0.5^3/10.

==>15+0.25+0.25+0.25+0.125/10.
==> 15.75+0.0125 = 15.7625%.

I hope it's helpful n understandable.

B M Vinutha said: (Aug 6, 2015)  
Dear sir/madam,

Please calculate the compound interest on rs 25000 for first 2 years @15% and @16%for 3rd year.

Muneer said: (Jan 12, 2016)  
Please explain how come 28/25?

Jhumu Chakrabortty said: (Jan 25, 2016)  
Why we are not taking minus 1 in the formula for compound interest?

Suneesh V said: (Feb 27, 2016)  
A sum of money lent at compound interest amount to Rs. 1210 in two years and to rupees 1464.10 in 4 years find the rate of interest.

Palani said: (Aug 26, 2016)  
How comes 28/25 * 28/25 * 28/25?

Sony Kumari said: (Oct 22, 2016)  
Can anyone explain it in short method?

Viki said: (Jan 12, 2017)  
Good method @Selva. Thanks for posting it.

Mohan said: (May 10, 2017)  
@Snehal and @Sujata.

p.c.p.a means per capital per annum.

Sankari said: (May 22, 2017)  
Please explain how 28/25 came?

Sivasankari said: (May 22, 2017)  
@Muneer.

= 25000 * (1+12/100) => 250009112/100)^3.
= 25000(56/50)^3.
= 25000(28/25)^3.

And now expand the cube root we get 25000 * 28/25 * 28/25 * 28/25.

Ashish Jadhav said: (Jul 14, 2017)  
(1+12/100) = 1 * 100 + 12/100 = 100 + 12/100 = 112/100 = 28/25.

It is cross multiplication.

Ashish Jadhav said: (Jul 14, 2017)  
It is cross multiplication.

(1+12/100).
= (1*100+12)/100,
= (100+12)/100,
= 112/100,
= 28/25 i.e. divided by 4.

Amit said: (Oct 31, 2017)  
12% = 12/100 = 3/25.
p = 25000.

Solve --- 25000x3/25 = 3000 first interest.

1st = 3000.
2nd = 3000 + 360. (3000x3/25=360).
3rd = 3000 + 360 + 360 + 43.20. (360x3/25=43.20).
--------------------------------------
9000+720+360+43.20 = 10123.20.

Its answer are exactly correct.
Sort and best math any Question solve in 15 second any problem.

Budhlani Badshah said: (Jul 24, 2018)  
@Amit.

Thank you for the best explanation.

Bhaskar Chakrabarty said: (Oct 1, 2018)  
What will be the rate of compound interest if a man invests Rs. 1, 01, 490 and get Rs. 2, 03, 500 after 10 years?

Can anyone answer it?

Kj B Vinothan said: (Jan 27, 2020)  
Rate interest 12 for 3 year.

1st 2 year =a+b+(a*b/100)=12+12+(12*12/100)=25.44%.
3rd year = 25.44+12+(12*25.55/100)=40.49%.

Then substitute the r value in simple interest for 1 year then you can get answer directly.

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