Simple Interest and Compound Interest Tricks: Formulas, Difference and Questions for SSC CGL, CHSL
Rahul Kumar
SSC Exam Expert & Content Editor
In this note
PDF Notes: Simple Interest and Compound Interest Tricks: Formulas, Difference and Questions for SSC CGL, CHSL
Premium PDF · one-time payment of ₹5 · instant access
Simple interest (SI) and compound interest (CI) give 2 to 3 questions in SSC CGL and CHSL maths. The SI questions are direct, and the CI questions can be solved fast with a few shortcuts for 2 and 3 years. These simple interest and compound interest tricks for SSC give the formulas, the difference shortcuts, the half-yearly rule and solved questions.
Simple Interest Formulas
| Item | Formula |
|---|---|
| Simple interest | SI = P × R × T / 100 |
| Amount | A = P + SI |
| Principal | P = SI × 100 / (R × T) |
| Rate | R = SI × 100 / (P × T) |
| Time | T = SI × 100 / (P × R) |
P is the principal, R is the rate per year and T is the time in years.
Compound Interest Formulas
| Item | Formula |
|---|---|
| Amount | A = P × (1 + R/100)^n |
| Compound interest | CI = A − P |
| Half-yearly | Use rate R/2 and time 2n |
| Quarterly | Use rate R/4 and time 4n |
Difference Between CI and SI
| Years | Difference |
|---|---|
| 2 years | P × (R/100)² |
| 3 years | P × R² × (300 + R) / 100³ |
Doubling and Tripling in SI
- If a sum becomes 2 times in T years at SI, the rate is 100/T %.
- If a sum becomes 3 times in T years at SI, the rate is 200/T %.
- The sum becomes n times in T years at the rate 100(n − 1)/T %.
Solved Examples
Example 1. Find the SI on 5,000 rupees at 8% for 3 years.
5000 × 8 × 3 / 100 = 1,200 rupees.
Example 2. Find the CI on 8,000 rupees at 10% for 2 years.
A = 8000 × 1.1 × 1.1 = 9,680. CI = 9,680 − 8,000 = 1,680 rupees.
Example 3. Find the difference between the CI and the SI on 5,000 rupees at 10% for 2 years.
5000 × (10/100)² = 5000 × 0.01 = 50 rupees.
Example 4. A sum becomes double in 5 years at SI. Find the rate.
100 / 5 = 20%.
Example 5 (half-yearly). Find the CI on 10,000 rupees at 10% a year for 1 year, compounded half-yearly.
Rate = 5% for 2 half-years. A = 10000 × 1.05 × 1.05 = 11,025. CI = 1,025 rupees.
Example 6. Find the difference between the CI and SI on 1,000 rupees at 10% for 3 years.
CI = 1000 × 1.331 − 1000 = 331 and SI = 300. The difference is 31 rupees.
Example 7. At what rate will a sum become 3 times in 8 years at SI?
200 / 8 = 25%.
Tips
- Remember that for 1 year the SI and the CI are equal (if compounded yearly).
- In CI, the interest is calculated on the amount of the previous year.
- For 20% rate use the fraction 6/5, for 10% use 11/10, and for 25% use 5/4 to solve CI fast.
- Check the time unit (years, half-years) before you put the numbers.
Quick Tips
- Learn the SI formula and the five variants.
- Learn the CI difference formula for 2 and 3 years.
- Use fractions for the rates (11/10, 6/5, 5/4) in CI.
- For half-yearly, halve the rate and double the time.
Quick Revision Points
- SI = PRT/100 and A = P + SI.
- CI = P(1 + R/100)^n − P.
- The difference of CI and SI for 2 years is P(R/100)².
- For half-yearly interest, use R/2 and 2n.
- For SI doubling in T years, R = 100/T.
Practice Questions With Answers
- Find the SI on 2,000 rupees at 5% for 4 years.
Answer: 400 rupees - Find the amount on 2,000 rupees at 5% SI for 4 years.
Answer: 2,400 rupees - Find the CI on 1,000 rupees at 10% for 2 years.
Answer: 210 rupees - Find the difference of CI and SI on 10,000 rupees at 5% for 2 years.
Answer: 25 rupees - In how many years will a sum double at 10% SI?
Answer: 10 years - Find the CI on 5,000 rupees at 20% for 2 years.
Answer: 2,200 rupees - The SI on 800 rupees for 3 years is 144 rupees. Find the rate.
Answer: 6% - The SI at 6% for 5 years is 360 rupees. Find the principal.
Answer: 1,200 rupees - Find the CI on 8,000 rupees at 10% for 1 year, compounded half-yearly.
Answer: 820 rupees - Find the CI on 1,000 rupees at 10% for 3 years.
Answer: 331 rupees
How to Practise This Chapter
Practise 10 questions every day and write the steps on paper. Then attempt timed sets from our practice papers and the previous year papers page. See all topics on the Mathematics notes page, read the previous topic Profit, Loss and Discount and the next topic Average Tricks. Formulas are in the Formula Guide and more practice is in the Quantitative Aptitude notes.
Frequently Asked Questions
What is the formula for simple interest?
SI = Principal × Rate × Time / 100.
What is the formula for compound interest?
CI = P(1 + R/100)^n − P.
What is the difference between SI and CI?
SI is on the original principal, and CI is on the principal plus the interest of the earlier years.
What is the difference of CI and SI for 2 years?
It is P × (R/100)².
How do I find CI for half-yearly compounding?
Use half the rate and double the number of periods.
If a sum doubles in T years at SI, what is the rate?
The rate is 100/T percent.
Are the SI and CI equal for 1 year?
Yes, if the interest is compounded yearly.
What is the amount?
The amount is the principal plus the interest.
Is interest asked in SSC exams?
Yes. SI and CI questions are asked in SSC CGL, CHSL and MTS.
What are common mistakes?
Using the wrong time unit and forgetting to subtract the principal from the amount in CI.
How much time should I take?
About 40 to 60 seconds.
Which rates should I memorise as fractions?
10% = 11/10, 20% = 6/5, 25% = 5/4 and 5% = 21/20.
Previous chapter
Logarithms Notes for SSC Mathematics
Next chapter
Average Tricks: Formulas, Weighted Average and Questions with Solutions for SSC CGL, CHSL
Rahul Kumar
SSC Exam Expert & Content Editor
Rahul is a senior SSC exam strategist with 8+ years of experience helping aspirants crack CGL, CHSL and MTS exams. He writes in-depth notification breakdowns, exam pattern guides and preparation strategies.