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Compound Interest
BASICS
T
 R 
A = P  1 +
 100 
 R 
T

CI = P 1 +  − 1
 100  

➢ If time is given in fraction then, say time = x Y , then

Z
x
 R   R Y
A = P  1 +   1+  
 100   100 Z 
Where:
CI = Compound interest
P = Principle or Sum
R = Rate of interest
T = Time
A = Amount

Some concepts:

➢ To find out rate in different cases, when A, P, T is given


 A 
1/t


R =   – 1  100
 P
  

➢ When sum become A1 in t1 time and A1 in t2 time
 1

 A2  t2 –t1 
R =   – 1  100%
 A1  
 
➢ When a sum become ‘x’ times of itself in ‘t’ years
 1 
R = ( x ) t – 1  100%
 
➢ When a sum becomes “n1’ in ‘t1’ time and ‘n2’ in ‘t2’ time
 1

 n2  t2 –t1 
R =   – 1  100%
n
 1  
 
➢ When difference(D) between CI and SI is given for two years, then
2
D= P   R 
 100 
➢ When difference(D) between CI and SI is given for three years, then
2
 R   300 + R 
D =P   
 100   100 
➢ When CI and SI of two years is given
2 (CI – SI) CI – SI
Rate =  100% or Rate=  100%
SI SI of one year

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➢ When CI and SI of second year is given

Rate= CI − SI  100% and Sum= (SI)

2

SI CI − SI