Staff Selection Commission (SSC) is going to conduct Combined Graduate Level (CGL) Exam for the recruitment to the different Group ‘B’ and Group ‘C’ posts in various Ministries of India. Jagranjosh.com has come up with SSC CGL Exam (Tier-I): Quantitative Aptitude: SI and CI: Concepts & Free Online Practice Set. Here, we provide concepts along with Free Online Practice Set to make the ease of students in cracking these questions in exam.
If a person X borrows some money from another person Y for a certain period, then after that specified period, X (borrower) has to return the borrowed money with some additional money. This additional money that X (borrower) has to pay is called Interest. The actual borrowed money is called Principal or Sum. The Principle and interest together is called amount, and the time for which X the borrower has been used the borrowed money is called the time. The interest that X has to pay for every 100 rupees each year is called rate percent per annum.
If the interest on a sum borrowed for a certain period is reckoned uniformly, then it is called Simple Interest and it is denoted by S.I.
Let Principle = P, Rate =R% per annum, and Time = T years. Then
Simple Interest + Principle = Amount
If we denote the amount by ’A’, then
Example:What will be the simple interest on Rs. 78,000 at 10% per annum for 9 years?
Solution:Here, given that
Principal (P) =78,000
Rate (R) = 10%
Time (T) = 9 years
Now, we know that
Therefore, the simple interest on Rs. 78,000 at 10% per annum for 9 years will be Rs. 70, 200.
When the borrower X and the lender Y agrees to fix up a certain time for example yearly, half yearly or quarterly to settle the previous money, then the difference between the amount and the money borrowed is said to be the Compound Interest and it denoted by C.I. In these calculations, principal for the second unit of time is the amount of first unit of time and so on.
Some important facts and formulae
Let Principal = P, Time = n years
Example: What will be the Compound Interest on Rs. 5000 at 5% per annum for 3 years, compounded annually?
Example. What is the compound interest on Rs. 12000 in 4 years at 20 % per annum, the interest being compounded half yearly.
Solution. Given that,
Principal = Rs. 12000, Rate = 20% per annum, Time = 4 years