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Compound Interest Questions and Answers | Formula

Compound Interest Questions

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 1st, 2nd and 3rd 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

[WpProQuiz 139]

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