Concept And Short trick on Compound Interest

When compound interest is applied, interest is paid on both the original principal and on earned interest. If you make a deposit into a bank account that pays compounded interest, you will receive interest payments on the original amount that you deposited,

as well as additional interest payments. This allows your investment to grow even more than if you were paid only simple interest.

IMPORTANT TRICKS:

1. ONE YEAR OF SIMPLE INTEREST = ONE YEAR OF COMPOUND INTEREST.

2. THE AMOUNT AT THE END OF FIRST YEAR (OR PERIOD) WILL BECOME THE PRINCIPAL FOR THE SECOND YEAR(OR PERIOD) AND AMOUNT AT THE END OF SECOND YEAR (OR PERIOD) BECOMES THE PRINCIPAL FOR THIRD YEAR.

AMOUNT = PRINCIPAL + INTEREST

A=P(1+R/100)ⁿ

^{Where, A=Amount}

^P=principal

^{R =Rate percentage}
n=number of years

For two years-

(1).CI/SI=(200+r)/200

(2).Difference between CI & SI =PR²/100²

For Three years-

 Difference between CI & SI =PR²(300+R)/100³

If lent money is Rs. P and each instalments is Rs. R, then

P = x/(1+r/100) + x/(1+r/100)^2 +     x / (1+r/100)^3 + ….