FIITJEE Simple & Compound

Theory Interest
Name: ____________________ Batch: Date:
Enrolment No: ______________ Faculty ID: MAT-AJ Dept. of MAT

SIMPLE INTEREST
DEFINITION:

(i) Principal: The money borrowed or lent out is called principal.

(ii) Interest: The additional money paid b the borrower is called the interest.

(iii) Amount: The total money (interest + principal) paid by the borrower is called the amount.
[A = P + I]

(iv) Rate of Interest: If the borrower paid interest of Rs. x on Rs. 100 for 1 year, then the rate of
interest is x percent per annum.

(v) Time: The period for which the sum is borrowed is called the time.

(iv) Simple Interest: If the principal remains the same throughout the loan period, then the
interest paid by the borrower is called simple interest
PR T
S.I =
100

COMPOUND INTEREST
If the borrower and the lender agree to fix up a certain interval of time (Say, a year or a half year or
a quarter of year etc.) so that the Amount (= Principal + Interest) at the end of an interval becomes
the principal for the next interval, then the total interest over all the intervals calculated in this way is
called the Compound Interest and is abbreviated as C.I.

❖ NOTE: S.I and C.I are equal for 1st year.

Important Formulae: If A is the amount, P is the principal, R% is the rate of interest compounded
annually and n is the number of intervals, then:
n
 R 
A = P 1 + 
 100 
 R 
n

And C.I. = A – P = P  1 +  − 1
 100  
❖ If compound interest calculated half – yearly
R
Rate = % per half year and Time = 2n half years
2
2n
 R 
So, A =  1 +
 2  100 
❖ If compound interest calculated quarterly, then
R
Rate = % per quarter, Time = 4n quarters
4
4n
 R 
So, A = P  1 +
 4  100 

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❖ Difference between CI and SI at the same rate.

Zero [for 1 year]

2
 r  r  SI
CI − SI = P   = [for 2 years]
 100  200
2
 r   r 
CI − SI = P    3 + [for 3 years]
 100   100 

❖ Let P be the principal and the rate of interest be R 1% for first year, R2% for second year,
R3% for third year and so on and in last Rn% for the nth year. Then, the amount A and the
compound interest C.I. at the and of n years are given by:
 R  R   R 
A = P  1 + 1   1 + 2  ...  1 + n 
 100   100   100 
 R  R   R  
& C.I. = A – P = P  1 + 1   1 + 2  ...  1 + 2  − 1
 100   100   100  

❖ Let P be the principal and the rate of interest be R% per annum. If the interest is
1
compounded annually but time is the fraction of a year, say 5 , then amount A is given by
4
 R 
R   
5
 4
A = P 1 +  1 +  and C.I. = A–P.
 100   100 
 
 

APPLICATION OF COMPOUND INTEREST

❖ Let P be the population of a city or town at the beginning of a certain year and the population
grows at a constant rate of R% per annum, then
n
 R 
Population after n years =  1 +  P
 100 
❖ Let P be the population of a city or a town at the beginning of a certain year. If the population
grown at the rate of R1% during first year and R2% during second year, then
 R   R 
Population after 2 years = P  1 + 1    1 + 2 
 100   100 

This formula may be extended for more than 2 years.

❖ If V0 is the value of an article at a certain time and R% per annum is the rate of depreciation,
then the value Vn at the end of n years is given by
n
 R 
Vn = Vo  1 − 
 100 

❖ In V0 is the value of an article at a certain time and the rate of depreciation is R 1% for first n1
year, R2% for next n2 years and so on the Rk% for the last nk years is given by
n n n
 R1   R2   Rk 
1 2 k

V = V0  1 −  1 −  ...  1 − 100 
 100   100   

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 FIITJEE
Simple Interest &
CPP Compound Interest
Name:__________________________________ Batch: Date: _____________
Enrollment No.:__________________________ Faculty ID: MAT-AJ Dept. of MAT
1. Find the sum required to earn a monthly interest of Rs 400 at 10% per annum at simple
interest.
(A) Rs 38000 (B) Rs 4000 (C) Rs 48000 (D) Rs 45000

2. In what time will the simple interest on Rs 400 at 10% per annum be the same as the simple
interest on Rs 1000 for 4 years at 4% per annum?
(A) 5 yrs (B) 4 yrs (C) 2 yrs (D) 6 yrs

3. At what rate per cent annum will a sum of money double in 8 years?
1 1 4 3
(A) 12 % (B) 10 % (C) 9 % (D) 12 %
2 2 5 4

4. A certain sum amounts to Rs 1586 in 2 years and Rs 1729 in 3 years. Find the rate and the
sum.
(A) 8% (B) 10% (C) 6% (D) 11%

5. A sum was put at simple interest at a certain rate for 2 years. Had it been put at 3% higher
rate, it would have fetched Rs 300 more. Find the sum.
(A) Rs 3000 (B) Rs 4500 (C) Rs 5000 (D) Rs 6000

6. Find the amount on a sum of Rs 400 for 3 years at simple interest at 5% per annum:
(A) Rs 460 (B) Rs 415 (C) Rs 435 (D) Rs 412

7. If a certain sum is doubled in 8 years on simple interest, in how many years will it be four
times?
(A) 24 years (B) 16 years (C) 32 years (D) 12 years

8. A sum of money at simple interest amount to Rs 1260 in 2 years and Rs 1350 in 5 years
then the rate per cent per annum is:
(A) 30% (B) 10% (C) 2.5% (D) 5%

9. The simple interest on a sum of money at 10% per annum for 6 years is half the sum. Then
the sum is:
(A) Rs 5000 (B) Not possible (C) Rs 4000 (D) Rs 6000

10. The simple interest on a certain sum for three years 4% per annum is Rs 48. The principal
is:
(A) Rs 550 (B) Rs 500 (C) Rs 450 (D) Rs 400

11. Find what sum of money will amount to Rs 900 in 4 years at 5% per annum on simple
interest?
(A) Rs 750 (B) Rs 650 (C) Rs 500 (D) Rs 550

12. In what time the simple interest on a sum of money be 3/8 of the principal with rate of
1
interest 3 % ?
8
(A) 9 years (B) 6 years (C) 12 years (D) 15 years

13. Find the amount and the compound interest on Rs 24000 compounded annually for 2 years
at the rate of 10% per annum.
(A) Rs 5000 (B) Rs 5080 (C) Rs 5040 (D) Rs 6000

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14. Find the amount and the compound interest on Rs 24000 compounded semi – annually for
1
1 years at the rate of 10% per annum. (A) Rs 4000 (B) Rs 3800
2
(C) Rs 2680 (D) Rs 3783
1
15. What sum invested for 1 years compounded half yearly at the rate of 4% per annum will
2
amount to Rs 132651?
(A) Rs 125000 (B) Rs 126000 (C) Rs 130000 (D) Rs 132000
16. Find the amount on Rs 6000 for 3 years at 8% for first year, 10% for second year and 12%
for third year
(A) Rs 9872.351 (B) Rs 8752.1245 (C) Rs 7983.366 (D) Rs 9872.2134
17. The difference between the compound interest and the simple interest on a certain sum at
12% per annum for 2 years is Rs 90. Find the sum.
(A) Rs 6540 (B) Rs 6250 (C) Rs 6550 (D) Rs 6520
18. Simple interest on a certain sum is 9 over 25 of the sum. Find the rate per cent and time, if
both are numerically equal.
(A) 6%, 6 years (B) 6%, 8 years (C) 8%, 6 years (D) 8%, 8 years
19. Consider the following statements:
If a sum of money is lent at simple interest, then the
2
1. money gets doubled in 5 years if the rate of interest is 16 %
3
2. money gets doubled in 5 years if the rate of interest is 20%
3. money becomes four times in 10 years if it gets doubled in 5 years
Of these statements
(A) 1 and 3 are correct (B) 2 alone is correct (C) 3 alone is correct (D) 2 and 3 are correct
20. A person takes a loan of Rs 200 at 5% simple interest. He returned Rs 100 at the end of 1
year. In order to clear his dues at the end of two years, he would pay:
(A) Rs 105 (B) Rs 110 (C) Rs 115 (D) Rs 115.50
21. The difference between the CI and SI on an amount of Rs 18000 in 2 years was Rs 405.
What was the rate of interest % pa?
(A) 10% (B) 15% (C) 20% (D) 25%
22. A sum of money invested at CI amounts to Rs 800 in 3 years and to Rs 840 in 4 years. The
rate of interest per annum is:
1 2
(A) 2 % (B) 4% (C) 5% (D) 6 %
2 3
23. The difference in SI and CI on a certain sum of money in 2 years at 15% pa is Rs 144. The
sum is
(A) Rs 6000 (B) Rs 6200 (C) Rs 6300 (D) Rs 6400
24. A sum of money placed at CI doubles itself in 5 years. It will amount to eight times it self at
the same rate of interest in:
(A) 7 years (B) 10 years (C) 15 years (D) 20 years
25. The difference between simple interest on Rs 500 for 4 years and the simple interest on Rs
600 for 3 year is Rs 10. The rate of interest is:
(A) 2% (B) 3% (C) 4% (D) 5%
ANSWERS
Simple Interest & Compound Interest
1. C 2. B 3. A 4. D 5. C 6. A
7. A 8. C 9. B 10. D 11. A 12. C
13. C 14. D 15. A 16. C 17. B 18. A
19. B 20. C 21. B 22. C 23. D 24. C
25. D
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