Simple & Compound Interest Formula
Simple & Compound Interest formulas and a topic-wise mock test for quantitative aptitude placement exams like TCS NQT, Infosys, and Wipro. Revise, then practice.
Key Simple & Compound Interest Formulas
Simple Interest - Linear Growth
Simple Interest is calculated only on the principal amount for the entire time period. The interest earned remains constant each year.
- SI = (Principal × Rate × Time) / 100
- Amount = Principal + Simple Interest
- Principal = (SI × 100) / (Rate × Time)
- Rate = (SI × 100) / (Principal × Time)
- Time = (SI × 100) / (Principal × Rate)
- Example: P=₹1000, R=10%, T=3 years → SI = 1000×10×3/100 = ₹300
Compound Interest - Exponential Growth
Compound Interest is calculated on both the principal and the accumulated interest from previous periods, creating exponential growth.
- Amount = P(1 + r/100)^n
- CI = P[(1 + r/100)^n - 1]
- Half-yearly: Rate = r/2, Time = 2n
- Quarterly: Rate = r/4, Time = 4n
- CI vs SI Difference (2 years): Difference = P(r/100)²
- Example: P=₹1000, R=10%, T=2 years → Amount = 1000×1.21 = ₹1210, CI=₹210
Practical Interest Calculations
Comparing Simple and Compound Interest with step-by-step examples.
- SI Example: P=₹1000, R=10%, T=2y → SI=₹200, Amount=₹1200 (₹100/year constant)
- CI Example: P=₹1000, R=10%, T=2y → Amount=₹1210, CI=₹210 (₹100 yr1, ₹110 yr2)
- Difference: For P=₹1000, R=10%, T=2y → CI-SI = ₹10 = 1000×(10/100)²
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