**Shortcut 75:**

Simple interest

*[latex]SI=\frac{PNR}{100}[/latex]*

P = Principle amount invested or borrowed

R = Rate of interest per term

N = Number of terms

Term = duration for which interest is calculated

Question:

A man invested Rs. 10000 at 4% per annum simple interest. What is the interest he will get at the end of 3 years?

Answer:

P = 10000; N = 3; R = 4

Substitute the values in the above equation, we get

SI = 10000 x 3 x 4/100

= 1200

**Shortcut 76:**

Compound interest

*[latex]CI=\frac R{100}P+\frac R{100}[Interest till last term][/latex]*

Question:

What is the compound interest obtained for Rs. 16000 at 2% per annum for three years?

Answer:

CI for three years = CI on first year + CI for second year + CI for third year

CI for first year = RP/100 = (3×16000)/100 = 480

CI for second year = (RP/100) + (3/100)480 = 494.4

CI for third year = (RP/100)+(3/100)(489.4+480) = 509.23

Total interest = 480 + 494.4 + 509.2

= 1483.6