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Shortcut 75:
Simple interest
\(SI=\frac{PNR}{100}\)
P = Principle amount invested or borrowed
R = Rate of interest per term
N = Number of terms
Term = duration for which interest is calculated
Question:
A man invested Rs. 10000 at 4% per annum simple interest. What is the interest he will get at the end of 3 years?
Answer:
P = 10000; N = 3; R = 4
Substitute the values in the above equation, we get
SI = 10000 x 3 x 4/100
= 1200

Shortcut 76:
Compound interest
\(CI=\frac R{100}P+\frac R{100}[Interest till last term]\)
Question:
What is the compound interest obtained for Rs. 16000 at 2% per annum for three years?
Answer:
CI for three years = CI on first year + CI for second year + CI for third year
CI for first year = RP/100 = (3×16000)/100 = 480
CI for second year = (RP/100) + (3/100)480 = 494.4
CI for third year = (RP/100)+(3/100)(489.4+480) = 509.23
Total interest = 480 + 494.4 + 509.2
= 1483.6