Example 1 · level 1
Diya invests ₹8,000 at 10% per annum, compounded annually. Find the compound interest after 2 years.
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- Year 1: 8,000 × 110/100 = ₹8,800.
- Year 2: 8,800 × 110/100 = ₹9,680.
- CI = 9,680 − 8,000 = ₹1,680.
Answer: ₹1,680
SSC & BANK EXAMS: QUANTITATIVE APTITUDE · SIMPLE & COMPOUND INTEREST
Compound interest
Amount A = P(1 + R/100)ⁿ and CI = A − P. With different rates each year, multiply the factors.
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Worked examples
Example 2 · level 2
Ananya invests ₹29,000 at 10% per annum, compounded annually. Find the amount after 3 years.
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- Year 1: 29,000 × 110/100 = ₹31,900.
- Year 2: 31,900 × 110/100 = ₹35,090.
- Year 3: 35,090 × 110/100 = ₹38,599.
- Amount = ₹38,599.
Answer: ₹38,599
Example 3 · level 3
Ananya borrows ₹11,200 from a bank. The rate of compound interest is 20% for the first year and 10% for the second year. Find the compound interest for 2 years.
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- Year 1: 11,200 × 120/100 = ₹13,440.
- Year 2: 13,440 × 110/100 = ₹14,784.
- CI = 14,784 − 11,200 = ₹3,584.
Answer: ₹3,584