Helpful Notes for students who are preparing for competitive exams.
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PBI Rules and Formulae PBI INSTITUTE COMPOUND INTEREST 1. 2. 3. 4. 5. x 1. 6. Let Principal = P, Rate = R % per annum, Time = n years. When interest is compound Annually: Amount = P 100 When interest is compounded Half-yearly: Amount = P 100 When interest is compounded Quarterly: Amount = P 100 When interest is compounded Annually but time is in fraction, say 3x2/5 years Amount = P 100 2/5 x R 100 Present worth of Rs. x due in n years hence is given by: n 4n 3 n Present Worth = x / 100 EXERCISE If the simple interest on a sum of money at 5% per annum for 3 years is Rs. 1200, find the compound interest on the same sum for the same period at the same rate. A. 1251 c. 1271 Solution Clearly, Rate Time s.l So,Principal Amount B. 1261 D. 1281 = 5% p.a = 3 years =Rs.1200. x 1200/3
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PBI PBI INSTITUTE 2. = Rs.9261 = Rs. 1261 What will be the compound interest on a sum of Rs.25,000 after 3 years at the rate of 12 p.c.p.a? A. Rs.9000.30 C. Rs. 10123.20 B. Rs. 9720 D. Rs. 10483.20 Solution Amount 3. = Rs. 35123.20. =Rs.10123.20. The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is B. 21/2 Solution Amount Let the time be n years. Then, + 4347) = Rs.34347. = 34347. =34347/3000 =11449/1000 n= 2years. 4. On a sum of money, the simple interest for 2 years is Rs. 660,while the compound interest is Rs.696.30,the rate of interest being the same in both the cases. The rate of interest is A. 100/0 Solution Difference in C.I and S.I for 2 years S.I for one years S.I on Rs.330 for 1 year Rate D. 10.5% - Rs(696.30-660) =Rs. 36.30. = Rs330. =Rs. 36.30 5. The difference between simple interest and compound interest on Rs. 1200 for one year at 10% per annum reckoned half yearly is A. Rs.2.50 Solution s.l D. Rs. 3.75 - Rs.(1200x10x1/100) Rs.120.
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PBI Difference PBI INSTITUTE 1200] Rs.123. - Rs.[123-120] 6. A sum of money invested at compound interest amounts to Rs. 800 in 3 years and to Rs. 840 in 4 years. The rate of interest per annum is c. 50/0 Solution S.I. on Rs.800 for 1 year B. 40/0 D. 5
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PBI PBI INSTITUTE 10. = Rs.8112. = Rs(8112 - 7500) = Rs. 612 Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quartely. A. Rs. 2522 C. Rs. 2572 Solution Principal Time=9 months Amount B. Rs. 2512 D. Rs. 2592 = Rs.16,OOO; = 3 quarters; = Rs.18522. - Rs.(18522 - 16000) = Rs.2522. 11. Simple interest on a certain sum of money for 3 years at 8% per annum is half the compound interest on Rs. 4000 for 2 years at 10% per annum. The sum placed on simple interest is A. Rs. 1550 C. Rs. 1750 Solution C.I. Rs.(4000x11/10x11/10- 4000) B. Rs. 1650 D. Rs. 2000 Sum 12. 4000] = Rs.940. =Rs. /3x8] = Rs.1750. Albert invested an amount of Rs.8000 in a fixed deposit scheme for 2 years at compound interest rate 5 p.c.p.a. How much amount will Albert get on maturity of the fixed deposit ? A. Rs. 8600 C. Rs. 8840 Solution Amount B. Rs. 8620 D. Rs. 8820 [8000 x = Rs.8820. 13. The present worth of Rs. 169 due in 2 years at 4% per annum compound interest is A. Rs.150.50 C. Rs.156.25 Solution Present Worth B. Rs.154.75 D. Rs.158 = Rs.(169x25/26x25/26) = Rs.156.25
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