Aptitude - Compound Interest - Discussion

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.

Please send me the short cut method for compound interest calculation specially for more than 2 years.

Anybody explain how comes 28/25*28/25*28/25 ?

Firstly simplify the 12/100 it will come 3/25 after that you will get 28/25.

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.

P.C.P.A means Percentage Compound Per Annum.

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

Please I want a accurate method for 28/25.

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).

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.