Simple interest and Compound interest shortcuts

   1.       Simple interest

   2.       Compound interest

·         Principal: Principal is the amount of loan borrowed.

·         Amount: it is the sum of Principal and Interest.

Compound interest- all formulas-are soon to come in the next post

So here is a full set of all shortcut formulas of simple interest:

First understand these shortcut terms

A= amount

P= Principal

SI= Simple Interest

R= rate

T= time

Formulas:

     ·         A= P+ SI

     ·         SI= (P*R*T)/100

    

     ·         P=100*SI/RT

     ·         R= 100*SI/PT

     ·         T= 100*SI/PR

     ·         A= P{1+(RT/100)}

     ·         When time is given in months(M), convert it into year by dividing it with 12

SI= PRM/1200

     ·         When time is given in days(D),  convert it into year by dividing it with 365

SI= PRD/36500

     ·         A sum of money becomes n times in t years at simple interest, then rate of interest will be

R= 100(n-1)/T    %

    ·         A sum of money becomes n times at R% per annum at simple interest, then

Time= 100(n-1)/R             years

    ·         If any sum is n times of simple interest, then

T= 100n/R            years

R= 100n/T            %

    ·         A person invests a certain amount of money at some rate of simple interest. If he had invested it at R% higher, then that person would have earned x (money- rupees or any currency of world) more. The sum that person invested  = 100x/nR

   ·         If at some rate of simple interest, any sum becomes n1 times in T1 years, then the sum becomes n2 times in

T2= T1(n2-1)/(n1-1)        years

   ·         If at the rate of R1 % of simple interest, any sum becomes n1 times in a certain amount of time, then then in the same time, the sum becomes n2 times if

R2= R1(n2-1)/(n1-1)        years

   ·         A person (A) lends x money to B for T1 years and y money to C for T2 years. The person Q money all together as interest, then the rate of interest was

= 100Q/(P1T1+P2T2)

  Example: 1

A sum of money gets doubled at 12% per annum. Then find the time?

solution:

time= 100(n-1)/R

      =100(2-1)/12

      =100/12

      = 25/3 years 

Example:2

a person borrows  x $ say $ 5000 for t years say 2 years at r1% say 4% per annum on simple interest. He uses his smartness and lends it to another person at bigger rate r2 % say 6.25% per annum for the same time. then his total gain in this transaction will be 

={PT(r2-r1)}/100

= {5000*2(6.25-4)}/100

= 100*2.25

=  $ 225