Short Tricks to Solve Compound Interest Questions for IPMAT 2025

Overview: Master compound interest with our expert guide on formulas and short tricks to efficiently solve compound interest questions for IPMAT 2025. Get practical tips and strategies to improve your exam performance and tackle this key section with confidence.

Understanding compound interest is fundamental to not only your school mathematics but also competitive exams like the IPMAT.

Unlike simple interest, which is calculated solely on the principal amount, compound interest is calculated on the principal amount plus any interest already accumulated.

Solving these are quite easy as we are used to solving them from school days, nonetheless solving them faster holds more priority during the entrance exams like IPMAT.

This article outlines essential strategies and provides simple tricks to solve compound interest questions for IPMAT.

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Concept of Compound Interest 

Compound interest can be visualized as "interest on interest," where the amount you earn from an investment grows because you earn interest on both the money you initially put in and the interest that has been added to that amount.

Here’s the basic formula used to calculate compound interest:

A = P{1 + R/100} nᵀ

Here T = Time
A = Amount
P = Principal
R = Rate of Interest
A = Amount = Principal + Compound Interest
N = Number of times interest applied per time period.

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Short Tricks to Solve Compound Interest Questions for IPMAT

There are some of the questions mentioned below with their solution that will help you to get the short tricks to solve compound interest questions for IPMAT.

Example: Calculate the difference in compound interest for 3 years and 2 years.

• Principal (P) = ₹6000
• Rate of Interest (R) = 5% per annum

Calculation:

Year	Principal at Start of the Year	Interest for the Year	Total at End of Year
1	₹6000	₹300 (5% of ₹6000)	₹6300
2	₹6300	₹315 (5% of ₹6300)	₹6615
3	₹6615	₹330.75 (5% of ₹6615)	₹6945.75

Total CI for 3 years: ₹945.75 (₹300 + ₹315 + ₹330.75)
Total CI for 2 years: ₹615 (₹300 + ₹315)
Difference: ₹330.75 (Interest for the 3rd year only)

This method breaks down the compound interest year by year, allowing you to quickly calculate or estimate CI over different periods.

Know: How To Solve Syllogism Questions for IPMAT 2025

Sample Question for Compound Interest for IPMAT 2025

Below is the set of sample questions for you to practice:

• Question 1: If P = 10000/-, T = 2 years 6 months, rate of interest = 20% compounded annually. Find Amount?
• Question 2: If P = 20,000, Rate of Interest = 3% p.a. Time = 2 years 3 months. Find Compound interest
• Question 3: If P = 7.30 lacs, Rate of Interest = 10% p.a. T = 2 years and 2 days. Find Compound Interest?
• Question 4: If P = 18000, Rate of Interest = 16.66%, Time = 1 year 73 days.  Find Compound Interest?
• Question 5: If P = 10400, Rate of Interest = 5%, Time = 1 year and 6 weeks. Find interest compounded annually.
• Question 6: If P = 8000, Time = 3 years, Rate of Interest = 1%, 2%, and 3%. Find CI – SI =?
• Question 7: The differences between Simple interest and compound interest on a certain sum of money at 5% for 2 years are Rs. 3. Find the sum.
• Question 8: If the difference between Compound interest and simple interest on a certain sum of money at 5% p.a. for 3 years is Rs. 122. Find the sum.
• Question 9: Simple interest on a sum of money for 2 years is Rs. 480 and Compound interest is Rs. 492. Find the sum and rate of interest.
• Question 10: Principal =? Time = 3 years, Rate of Interest = 15%, Compound interest – Simple interest = Rs. 1701. Find Principal value?

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Preparation Tips for Practice Compound Interest Questions for IPMAT

1. Understand the Formula: Make sure you're comfortable with using the compound interest formula and modifying it based on the compounding frequency (annually, semi-annually, quarterly, etc.).
2. Use a Scientific Calculator: For actual exams, practice using a scientific calculator to speed up your calculations.
3. Create Shortcuts: Develop personal shortcuts and mnemonics to remember steps and formulas.
4. Practice Regularly: Regular practice with varying difficulty levels of questions can enhance speed and accuracy.

Mastering the art of solving compound interest calculations quickly is crucial for success in the IPMAT.

By understanding and applying the short tricks to solve compound interest questions for IPMAT, candidates can efficiently tackle this section, allowing them to save time for more challenging problems, ultimately enhancing their overall performance in the exam.

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Key Takeaways:

• Understand the Formula: Mastery of the compound interest formula A=P(1+R100)N×TA = P(1 + \frac{R}{100})^{N \times T}A=P(1+100R​)N×T is crucial for adapting quickly to various exam problems.
• Fast Calculation Skills: Developing swift calculation methods is key for efficiently tackling time-restricted exam sections like those in IPMAT.
• Use of Technology: Proficiency with scientific calculators enhances speed and accuracy, providing an advantage during the exam.
• Diverse Practice: Engaging in consistent practice across a spectrum of problems ensures preparedness for all levels of question complexity.
• Personal Shortcuts: Creating and using personal calculation shortcuts can significantly reduce solving time and improve efficiency during the test.