What is Simple & Compound Interest?

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Simple & Compound Interest | Quantitative Aptitude Notes for 2026 Exams

Simple & Compound Interest Quantitative Aptitude — Study Notes & MCQ Practice 2026

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Simple & Compound Interest?

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Study Notes

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1. SI vs CI (Core Understanding)

SI is like a FIXED SALARY (same every year), while CI is like a SNOWBALL (grows every year).

✔ SI → Interest on Principal only
✔ CI → Interest on Principal + Interest
✔ First Year → SI = CI (Always SAME)

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2. Most Important Formulas

$$ SI = \frac{P \times R \times T}{100} $$

$$ Amount = P\left(1 + \frac{R}{100}\right)^T $$

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3. 2-Year Shortcut Trick (Most Asked)

Difference between CI & SI for 2 years:

$$ P \times \left(\frac{R}{100}\right)^2 $$

🚀 Direct answer in seconds — no long calculation needed!

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4. Compounding Trap (Very Important)

HALF-YEARLY

R / 2

Time × 2

QUARTERLY

R / 4

Time × 4

ANNUAL

Time same

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5. Times / Multiple Hack (CI Killer Trick)

If money becomes X times → Think in powers!

✔ 3 times → 3¹
✔ 9 times → 3²
✔ Time = Base Time × Power

⚡ Solve in 2–3 seconds without formula!

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6. Logic Without Formula (SI Shortcut)

If Amount is given at different times:

✔ Find difference in time
✔ Find total interest
✔ Get 1-year interest
✔ Subtract to get Principal

🚀 No Rate needed — pure logic based!

🔥 Exam Winning Tips

Always check compounding type FIRST before solving.

Target 2-year difference questions — fastest marks!

Remember: SI = linear, CI = exponential growth.

Avoid long calculations — use shortcuts & logic.

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