If P is Principal amount, R is Percentage Rate, n is number of years .
Rule :
When interest is compound annually :
This is a traditional formula by using this formula we face some difficulty and time consumption .So we need to learn a shortcut method for competitive exams .
Shortcut method :
Here every year have one code as shown in below picture .
Example :
1. Find compound interest on 6000 for 3 years at 5% per annum ?
Step : 1 Here first we need to remember year and respective code . Here they given 3 years .so code is " 3 3 1 " .
Step : 2 From the question P = 6000 , interest rate = 10% .
Step : 3 Write the code as given below .
Compound Interest = 3(......) + 3(......) + 1(.....)
Step : 3 rate is 10% and P = 6000 . calculate 10 % of 6000 . you get 600 . write that as follows
C.I = 3(600) + 3(......) + 1(.....)
Step : 4 Than calculate 10% of 600 (here you should calculate % of which you get in previous step ) . than you get 60 . write that as follows given below.
C.I = 3(600) + 3 (60) +1(.....)
Step : 5 Than calculate 10% of 60 .you get 6 and write that as follow give below
C.I = 3(600)+3(60)+(6) = 1800+180+6 = 1986
Note : If interest rate is compounded for Half yearly, Quarterly,Monthly and 4-months .we need to follow give .
Rule :
When interest is compound annually :
This is a traditional formula by using this formula we face some difficulty and time consumption .So we need to learn a shortcut method for competitive exams .
Shortcut method :
Here every year have one code as shown in below picture .
1. Find compound interest on 6000 for 3 years at 5% per annum ?
Step : 1 Here first we need to remember year and respective code . Here they given 3 years .so code is " 3 3 1 " .
Step : 2 From the question P = 6000 , interest rate = 10% .
Step : 3 Write the code as given below .
Compound Interest = 3(......) + 3(......) + 1(.....)
Step : 3 rate is 10% and P = 6000 . calculate 10 % of 6000 . you get 600 . write that as follows
C.I = 3(600) + 3(......) + 1(.....)
Step : 4 Than calculate 10% of 600 (here you should calculate % of which you get in previous step ) . than you get 60 . write that as follows given below.
C.I = 3(600) + 3 (60) +1(.....)
Step : 5 Than calculate 10% of 60 .you get 6 and write that as follow give below
C.I = 3(600)+3(60)+(6) = 1800+180+6 = 1986
Note : If interest rate is compounded for Half yearly, Quarterly,Monthly and 4-months .we need to follow give .
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