Compound Interest Questions – General Questions An aptitude test is an assessment used to determine a candidate’s cognitive ability or personality. They’re extremely common in job assessments

Compound Interest Formula

The formula for compound interest, including principal sum, is:
A = P (1 + r/n) ^(nt)

Where:

1. A = the future value of the investment/loan, including interest
2. P = the principal investment amount (the initial deposit or loan amount)
3. r = the annual interest rate (decimal)
4. n = the number of times that interest is compounded per unit t
5. t = the time the money is invested or borrowed for

1. Let Principal = P, Rate = R% per annum, Time = n years.
2. When interest is compound Annually:   Amount = P(1 +R/100)^n
3. Interest is compounded Half-yearly:    Amount = P{1 +(R/2)/100}^2n
4. When interest is compounded Quarterly:    Amount = P{1 +(R/4)/100}^4n
5. When interest is compounded Annually but time is in fraction, say 3(2/5) years.    Amount = P(1 +R/100)^3 * P{1 +(2R/5)/100}
6. When Rates are different for different years, say R₁%, R₂%, R₃% for 1^st, 2^nd and 3^rd year respectively.    Then, Amount = P(1 +R1/100) P(1 +R2/100) P(1 +R3/100)
7. Present worth of Rs. x due n years hence is given by:    Present Worth = x / (1 +R/100)^n

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