Aptitude - Compound Interest - Discussion

Please I want a accurate method for 28/25.

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

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

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.

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

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

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

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.

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?

@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.