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Preface
The Digi-notes (Compound Interest) as presented here is prepared strictly according to IBPS-PO,
IBPS-Clerk, IBPS-SO and other PO/Clerk level competitive exams. The main aim of the Digi-notes
is to develop the notion of the Compound Interest so that candidate would be able to handle the
quantitative problems easily and conveniently in their competitive exams. Candidates are
advised to handle the Digi-notes by keeping in mind that they are going to LEARN (NOT STUDY)
the Compound Interest so that you; yourself would be able to minimize the steps required to
conclude the answer of the question and hence develop the SHORT TRICKS.

All the best

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 Contents
1. Preface .. 2
2. Contents 3
3. Introduction 4
4. Approach for Compound Interest Questions..... 4
5. Questions .... 5

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Introduction:
Likewise as in simple interest; in compound interest also we will use the formulae rarely. The
compound interest formulae are too costly to use in terms of time and calculation. We will learn
in the coming section that how to use; again; the percentage tool to solve the compound interest
questions in nearly 90% of the questions.

Approach for Compound Interest Questions:

In IBPS PO, IBPS Clerk, IBPS SO and other competitive examinations; if the examiner asks directly
the question to find the compound interest or simple interest or their difference; they are mainly
focussing on 2 years time and 3 years time. In rare case; only 2 to 3 times; the question related
to 4 years time is asked; and thats too easy. So our main focus will be on 2 years question and
3 years question.
Next we are going to discuss the SLAB METHOD approach for cracking the verities of questions
related to compound interest. If P is the principle and r% is the rate of interest:

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1. For 2 year:

r
I P
100
r r r
II P P
100 100 100

Learn the following properties:

2. For 3 year:
r
I P
100
r r r
II P P
100 100 100
r r r r r r r r
III P P P P
100 100 100 100 100 100 100 100

Learn the following properties:

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Questions:

Now we are equipped enough to solve the following questions:

2
Question 1: Find the compound interest on Rs.58800 at 14 % pa after 2 years; compounded
7
annually.
2 1
Solution: 14 7 % 7

I Rs.8400
II Rs.8400 Rs.1200
CI 2 Rs.8400 Rs.1200 Rs.18000
2
Question 2: Find the compound interest on Rs.32400 at 16 3 % pa after 3 years; compounded
annually.
2 1
Solution: 16 3 % 6

I Rs.5400
II Rs.5400 Rs.900
III Rs.5400 Rs.900 Rs.900 Rs.150
CI 3 Rs.5400 3 Rs.900 Rs.150 Rs.19050

Question 3: Find the difference between the compound interest and the simple interest at 5% pa
on Rs.1842 after 2 years; compounded annually.

I Rs.92.10
Solution: II Rs.92.10 Rs.4.605
CI SI Rs.4.605

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 1
Question 4: Find the difference between the compound interest and the simple interest at 12 2%
pa on Rs.1280 after 3 years; compounded annually.
1 1
Solution: 12 2 % 8

I Rs.160
II Rs.160 Rs.20
III Rs.160 Rs.20 Rs.20 Rs.2.5
CI SI 3 Rs.20 Rs.2.5 Rs.62.50

Question 5: The simple interest on a certain sum of money at 3% pa after 2 years is Rs.80. Find
the compound interest on the same sum of money at the same rate after 2 years.

I Rs.40
Solution: II Rs.40 Rs.1.2
CI Rs.81.20
Question 6: The simple interest on a certain sum of money at 5% pa after 3 years is Rs.150. Find
the difference between the compound interest and the simple interest on the same sum of
money at the same rate after 3 years.
I Rs.50
II Rs.50 Rs.2.5
Solution:
III Rs.50 Rs.2.5 Rs.2.5 Rs.0.125
CI SI 3 Rs.2.5 Rs.0.125 Rs.7.625

Question 7: The simple interest on a certain sum of money at a certain rate of interest after 2
years is Rs.84 and the compound interest on the same sum of money at the same rate after 2
years is Rs.86.10. Find the rate of the interest per annum and the principle.
I Rs.42
IIRs.42 Rs.2.1
r
Solution: Now 42 Rs.2.1
100
r 5% p.a.
100
And P 42 Rs.840
5
Question 8: The difference between the compound interest and the simple interest on a certain
sum of money at 5% pa after 2 years is Rs.1.50. Find:
1. The Principle
2. The Simple Interest
3. The compound Interest

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 P Rs.600
I Rs.30
Solution:
II Rs.30 Rs.1.50
SI Rs .60
CI Rs .61.50

Question 9: The compound interest on a certain sum of money at 20% pa after 2 years is
Rs.243.10. Find the simple interest on the same sum of money at the same rate after 2 years.
1
Solution: Let P 25% Square ( 2 years) of Denominator of 20% 5

P 25%
I 5%
II 5% 1%

Rs.243.10
SI 10% Rs.221
11%
2
Question 10: The compound interest on a certain sum of money at 16 3 % pa after 2 years is
Rs.585.26. Find
1. Principle
2. The simple interest on the same sum of money at the same rate after 2 years.
2 1
Solution: Let P 36% Square ( 2 years) of Denominator of 16 3 % 6

P 36%
I 6%
II 6% 1%

Rs.585.26
1 P 36% Rs.1620.72
13%
Rs.585.26
2 SI 12% Rs.540.24
13%
Question 11: The difference between the compound interest and the simple interest on a certain
1
sum of money at 11 9 % pa after 3 years is Rs.350. Find the difference between the compound
interest and the simple interest on the same sum of money at the same rate after 2 years?
1 1
Solution: Let P 729% Cube ( 3 years) of Denominator of 11 9 % 9

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 P 729%
I 81%
II 81% 9%
III 81% 9% 9% 1%

Rs.350
CI SI 2 years 9% Rs.112.50
28%
2
Question 12: The compound interest of the third year on a certain sum of money at 14 7 % pa is
Rs.7680. Find the compound interest on the same sum of money at the same rate after 2 years.
2 1
Solution: Let P 343% Cube ( 3 years) of Denominator of 14 %
7 7

P 343%
I 49%
II 49% 7%
III 49% 7% 7% 1%

Rs.7680
CI After 2 years 105% Rs.12600
64%
Question 13: The difference between the compound interest of the third year and the compound
2
interest of the second year on a certain sum of money at 16 3 % pa is Rs.98. Find the sum.
2 1
Solution: Let P 216% Cube ( 3 years) of Denominator of 16 3 % 6

P 216%
I 36%
II 36% 6%
III 36% 6% 6% 1%

Rs.98
P 216% Rs.3024
7%
Question 14: The respective ratio of the difference between the compound interest and the
simple interest on a certain sum of money after 3 years and the difference between the
compound interest and the simple interest on the same sum after 2 years is 25:8. Find the rate
of the interest.

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 I
II 8
III 8 8 1
Solution:
r
8 1
100
1
r 12 % pa
2
Question 15: Find the compound interest on Rs.8000 after 2 years; the rate of the interest being
4% pa for the first years and 6% pa for the second year.
Rs.8000
4% I Rs.320
Solution:
6% II Rs.480 Rs.19.20
CI Rs.320 Rs.480 Rs.19.20 Rs.819.20
Question 16: Find the compound interest on Rs.10000 after 3 years; the rate of the interest being
4% pa for the first years; 5% pa for the second years and 6% pa for the third year.
Rs.10000
4% I Rs.400
Solution: 5% II Rs.500 Rs.20
6% III Rs.600 Rs.24 Rs.30 Rs.1.20
CI SI Rs.400 Rs.500 Rs.600 Rs.20 Rs.24 Rs.30 Rs.1.20 Rs.1575.20
1
Question 17: Find the compound interest on Rs.5000 at 20% pa after 1 years; the interest being
2
compounded annually.
Rs.5000
20% Y Rs.1000
Solution:
10% HY Rs.500 Rs.100
CI Rs.1600
1
Question: Find the compound interest on Rs.5000 at 20% after 1 2 years; the interest being
compounded half yearly.

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 Rs.5000
10% HY1 Rs.500
Solution: 10% HY2 Rs.500 Rs.50
10% HY3 Rs.500 Rs.50 Rs.50 Rs.5
CI Rs.1650
1
Question 18: Find the compound interest on Rs.5000 at 20% after 1 4 years; the interest being
compounded half yearly.
Rs.5000
10% HY1 Rs.500
Solution: 10% HY2 Rs.500 Rs.50
1
5% HY Rs.250 Rs.25 Rs.25 Rs.2.5
2
CI Rs.1352.50
1
Question 19: Find the difference between the compound interest on Rs.2000 at 10% pa after 1
2
years; when compounded annually and compounded half yearly?

Rs.2000 Rs.2000
10% Y Rs.200 5% HY1 Rs.100
Solution: 5% HY2 Rs.100 Rs.5
5% HY Rs.100 Rs.10
5% HY3 Rs.100 Rs.5 Rs.5 Rs.0.25
CI Rs.310
CI Rs.315.25

Required Difference = 315.25 310 = Rs. 5.25

Question 20: Find the compound interest on Rs.2000 at 20% pa after 9 months; the interest being
compounded quarterly?
Rs.2000
5% Q1 Rs.100
Solution: 5% Q2 Rs.100 Rs.5
5% Q3 Rs.100 Rs.5 Rs.5 Rs.0.25
CI Rs.315.25
Question 21: A certain sum of money grows to 40759 after 2 years at a certain rate of interest;
compounded annually; while grows to Rs.44834.90 after 2 years at the same rate; compounded
annually. Find the rate of interest and principle.

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 r
40759 44834.90 40759
100
r
Solution: 40759 4075.90
100
r 10%
Question 22: A certain sum of money grows to 7290 after 6 years at a certain rate of interest;
compounded annually; while grows to Rs.531441 after 12 years at the same rate; compounded
annually. Find the rate of interest and principle.

Rs.182250
2
A62years
Solution: P Rs.
A12 years Rs.531441

Question 23: A certain sum of money grows to 3 times of itself at a certain rate of interest;
compounded half yearly; after 2 years. In how many years would the same sum of money grows
to 27 times of itself.
Solution: 2
3 2
9 2
27

6
Question 24: After how many years; compounded yearly; would Rs.1875 grows to Rs.2028 at 4%
pa?
CI Rs.2028 Rs.1875 Rs.153
P=1875
Solution: Y Rs.75
2 years
Y Rs.75 Rs.3
Hence after 2 years.

Question 25: After how many years; compounded half yearly; would Rs.800 grows to Rs.926.10
at 10% pa?
P Rs.800
1
2 Y Rs.40

1
3 half years Y Rs.40 Rs.2
Solution: 2
1
2 Y Rs.40 Rs.2 Rs.2 Rs.0.1

CI 126.10 926.10 800
1
Hence aftre r 1 years
2

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Question 26: At what rate percent per annum; compounded annually; will Rs.80000 amount to
Rs.88200 in 2 years?

CI Rs.88200 Rs.80000 Rs.8200

By Hit and Trial :
I Rs.4000
II Rs.4000 Rs.200
Solution:
r
Now 4000 200
100
100
r 200 5 p.c. p.a.
4000

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