Compound Interest Questions and Answers | Formula
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:
- A = the future value of the investment/loan, including interest
- P = the principal investment amount (the initial deposit or loan amount)
- r = the annual interest rate (decimal)
- n = the number of times that interest is compounded per unit t
- t = the time the money is invested or borrowed for
- Let Principal = P, Rate = R% per annum, Time = n years.
- When interest is compound Annually: Amount = P(1 +R/100)^n
- Interest is compounded Half-yearly: Amount = P{1 +(R/2)/100}^2n
- When interest is compounded Quarterly: Amount = P{1 +(R/4)/100}^4n
- 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}
- 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)
- Present worth of Rs. x due n years hence is given by: Present Worth = x / (1 +R/100)^n