Aptitude - Compound Interest - Discussion

How 1 came in place of P ? Can you guys explain me please.

@Babai.

When you divide 10/100 it will give you 1/10 then when you will add it with one it will give you 11/10. Actually it comes in the mixed fraction.

It's very simple just look at the question you have a direct relation between amount 525 and 10%.

For 2 years u get 525 at 10% for 1 year it is around 260. So if u invest around 2500 for 1 year at 10% the amount u get as interest is 250 but compound interest is slightly higher than simple interest and remember this is logical.

Now just put sum in simple interest formula
2500 * 4 * 5/100 = 500.

@Sandy.

Actually this is the formula for finding amount, amount= principle +interest so when we apply the ci. The formula basically finding the amount so when we minus it with the principle it equals to the interest which is 525.

It should be 121 instead of 21 cuz 11^2=121,
525=p(1+10/100)^2,
525=p(110/100)^2.

The amount at the end 1st year, A=45000(1+ 15/100)
= Rs 51750.

The farmer paid Rs 15000, so amount left ,A = 51750 -15000
= Rs 36750.

The amount at the end of 2nd year, A= 36750(1+ 15/100)
=Rs 42262.5.

The farmer has to Rs 42262.5 at the end of the second year.

@Pratiksha,
The general formula for calculating compound interest is,
P*(1+R/100)^n, but remember to subtract off the principal after in order to get the interest,

For instance, CI =Amount - Principal.

But, in case you wish to do it at once your apply P*(1+R/100)^n - P by using this formula you automatically get the interest compounded, you may not need to subtract off the principal again like in the first case.

Can anybody tell me when to use this formula?

P*(1+R/100)^-P.
and when to use,
P*(1+R/100)^.

Please, explain it.

21% = 525 then 20% = 525/21*20 = 500 ans.

Thank you @P Kumar.