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Simple Interest & Compound Interest - Quantitative Aptitude for IBPS PO, IBPS Clerk, SBI PO, SBI Clerk, RBI, CSAT, SSC, LIC, NICL exams

Interest is like consideration given by a borrower of money to the lender for the use of the mony borrowed or lent.

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Terminoloy

**→ Principal, P **= sum of the money deposited or loaned

**→ Interest, I **= money paid by the borrower calculated on the basis of principal

**→ Time, T **= The duration for which the money is borrowed

**→ Rate of Interest,⇒**= rate at which the interest is charged on the principal

**→ Amount, A **= Principal, P + Interest, I

**→ Simple Interest, SI **= Fixed percentage of the principal

**→ Compound Interest, CI **= The amount received at the end of the period or first year becomes principal for the next period or second year and so on.

The interest is calculated on the new principal at the end of every time period

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Formulas

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⇒ Simple Interest SI

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⇒ Compound Interest CI

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⇒ Difference between Compound Interest and Simple Interest for __two years__

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⇒ Difference between Compound Interest and Simple interest for __three years__

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⇒ The CI in the n th year is X and CI in n+1 th year is Y, then the rate of interest R is

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⇒ A principal amounts to X times in T years at __Simple Interest__. In how many years will it becomes Y times

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⇒ A principal amounts to X times in T years at __Compound Interest__. In how many years will it becomes Y times.

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⇒ The total SI in the first two years is Rs. X and the total CI in the first two years is Rs. Y. What is the Rate of interest, if both the Principal and Rate of interest are same for both SI and CI?

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Depreciation

Prices of some articles depreciates in their value over a period of time

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Population

Population increase or decrease is calculated as compound interest

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Instalments

When the borrower paid the sum in parts, then it is said that the borrower is paying in installments