Compound Interest

Basic Formulas of Compound Interest

If A = Amount
P = Principle
C.I. = Compound Interest
T = Time in years
R = Interest Rate Per Year

Compound Interest Formula

Compound Interest

 

Shortcut Formulas for Compound Interest

Rule 1: If rate of interest is R1% for first year, R2% for second year and R3% for third year, then

Compound Interest Shortcut Methods

 

Rule 2:
If principle = P, Rate = R% and Time = T years then

  1. If the interest is compounded annually:Compound Interest
  2. If the interest is compounded half yearly (two times in year):Compound Interest Shortcut Formulas
  3. If the interest is compounded quarterly (four times in year):Compound Interest Shortcut Methods

 

 

Rule 3: If difference between Simple Interest and Compound Interest is given.

  • If the difference between Simple Interest and Compound Interest on a certain sum of money for 2 years at R% rate is given thenCompound Interest Shortcut Formulas

 

  • If the difference between Simple Interest and Compound Interest on a certain sum of money for 3 years at R% is given thenCompound Interest Shortcuts

 

Rule 4: If sum A becomes B in T1 years at compound interest, then after T2 years

Compound Interest Shortcut Methods