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Aptitude Shortcuts and Mind Tricks to Find Simple Interest and Compound Interest:
Question:
1). What is the compound interest occurred on a principle of amount of Rs. 12,000 at the rate
of interest 4% per annum after the period of 2 years?
Given:Principle amount (P) Rs. 12,000
Rate of interest (R) - 4%
Time Period (T) - 2 years.
Normal Method:

Compound Amount- P (1 + 100 )T

Compound Interest- Compound Amount Principle Amount
Substitute the given data in the above formula, then I will become as,
4

C.A= 12,000 (1 + 100 )2

104

= 12,000 (100 )2
= 12,000 (1.04)2
= 12,000 1.0816
= 12,979.2
Then,
Compound Interest- Compound Amount Principle Amount

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C.I= 12,979.2 12,000
C.I= 979.2
Answers is: 979.2
If you use this method it will take more than 1 minute to solve this problem. Here we have an
easily shortcut to solve this problem with in 20 second.
Shortcut Method:
Step 1:
Find 4% in 12,000
Answer is: 480
(Consider 12,000 as 100%, then 1% = 120, and 4% = 120 4, your answer is 480)
This is for First year, 2 years, 480 2 = 960.
Step-2:
Divide the given rate of interest by 2.
=

4%
2

= 2%.
Now, find 2% in 960 (take the answer from step 1)
= 19.2
Add Step 1 and Step 2:
= 960 + 19.2

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= 979.2
Answer is: 979.2
Note: This shortcut method is applicable to find the compound interest, only when the given
time period is 2 years.
Examples Questions:
1). What is the compound interest occurred on a principle of amount of Rs. 8,000 at the rate of
interest 3% per annum after the period of 2 years?
Shortcut method:
Step 1:
Find 3% in 8,000
Answer is: 240
This is for First year, in sum they asking for 2 years so, 240 2 = 480.
Step-2:
Divide the given rate of interest by 2.
=

3%
2

= 1.5%.
Now, find 1.5% in 480 (take the answer from step 1)
= 7.2
Add Step 1 and Step 2:
= 480 + 7.2
= 487.2
Answer is: 487.2
2). What is the compound interest occurred on a principle of amount of Rs. 15,000 at the rate
of interest 5% per annum after the period of 2 years?
Step 1:
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Find 5% in 15,000
Answer is: 750
For Two Years, 750 2 = 1500.
Step-2:
Divide the given rate of interest by 2.
=

5%
2

= 2.5%.
Now, find 2.5% in 1500 (take the answer from step 1)
= 37.2
Add Step 1 and Step 2:
= 1500 + 37.2 , = 1537.2
Answer is: 1537.2

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