Simple and Compound Interest Tricks for Placements (with Solved Questions)

Simple and compound interest tricks for placement aptitude tests: key formulas, the CI minus SI shortcut, doubling rules, 15 solved questions and 10 practice questions with answers.

  Company-wise Interview Questions   Oct 19, 2026   10  Add to Reading List

Why Interest Questions Are Easy Marks

Simple interest (SI) and compound interest (CI) appear regularly in the quantitative section of placement tests such as TCS NQT, Infosys, Wipro, Accenture and Capgemini. They are also some of the easiest marks in the paper, because almost every question uses one of a handful of formulas.

Students lose time when they expand (1 + R/100)ⁿ by hand or calculate CI and SI separately when only their difference is asked. The shortcuts in this guide remove that work.

Compound interest is really successive percentage change, so it helps to read our Percentage Shortcuts guide first. This post covers the formulas, seven shortcuts, 15 solved questions and a 10-question practice set with answers.

The Core Formulas

Use these terms throughout: P = principal (the original sum), R = rate of interest per year (%), T or n = time in years, A = amount (principal + interest).

Simple Interest

Interest is calculated only on the original principal, so it is the same every year.

SI = (P × R × T) ÷ 100     A = P + SI

Compound Interest

Interest is added to the principal at the end of each period, so next year's interest is calculated on a bigger amount.

A = P × (1 + R/100)n     CI = A − P

SI vs CI at a Glance

PointSimple interestCompound interest
Interest calculated onOriginal principal onlyPrincipal + interest earned so far
Interest each yearSame every yearGrows every year
Growth patternStraight line (arithmetic)Curve (geometric)
For 1 year (yearly compounding)Equal to CIEqual to SI
For 2 or more yearsSmallerLarger

Remember the fourth row: for one year with yearly compounding, SI and CI are always equal. Some questions test exactly this.

7 Interest Shortcuts for Placement Tests

Shortcut 1: Use Ready Multipliers for CI

Learn these values so you never expand brackets in the exam:

RateAfter 2 yearsAfter 3 years
5%1.10251.157625
10%1.211.331
20%1.441.728

Example: ₹16,000 at 10% CI for 3 years becomes 16,000 × 1.331 = ₹21,296, so CI = ₹5,296.

Shortcut 2: Two-Year CI as a Single Percentage

Over 2 years at R%, compound interest equals a single increase of:

2R + R² ÷ 100   (%)

At 10%, that is 20 + 1 = 21%. So CI on ₹10,000 for 2 years = 21% of 10,000 = ₹2,100. This is the same successive-change formula from the percentage guide.

Shortcut 3: CI − SI for 2 Years

CI − SI = P × (R/100)²

Example: ₹5,000 at 8% for 2 years. Difference = 5,000 × 0.08 × 0.08 = ₹32. No need to find CI or SI separately.

Shortcut 4: CI − SI for 3 Years

CI − SI = P × (R/100)² × (3 + R/100)

Example: ₹10,000 at 10% for 3 years. Difference = 10,000 × 0.01 × 3.1 = ₹310.

Shortcut 5: Doubling and Multiplying with SI

With simple interest, a sum becomes n times itself when the interest equals (n − 1) × P. So:

Time to become n times = (n − 1) × 100 ÷ R

Example: at 12.5% SI, a sum doubles in 100 ÷ 12.5 = 8 years and triples in 2 × 8 = 16 years.

Shortcut 6: Multiplying with CI

With compound interest, if a sum becomes k times in t years, it becomes k² times in 2t years and k³ times in 3t years.

Example: if a sum doubles in 5 years at CI, it becomes 4 times in 10 years and 8 times in 15 years. Compare this with SI, where 8 times would take 7 × 5 = 35 years.

Shortcut 7: Half-Yearly and Quarterly Compounding

For half-yearly compounding, halve the rate and double the number of periods. For quarterly, divide the rate by 4 and multiply the periods by 4.

Half-yearly: A = P × (1 + R/200)2n     Quarterly: A = P × (1 + R/400)4n

Example: ₹20,000 at 10% per year, compounded half-yearly, for 1 year. Use 5% for 2 periods: 20,000 × 1.1025 = ₹22,050, so CI = ₹2,050. With yearly compounding it would be only ₹2,000.

15 Solved Interest Questions for Placements

These questions follow the style used in campus aptitude tests. Try each one for about 45 seconds before checking the solution.

Q1. Find the simple interest on ₹8,000 at 6% per year for 3 years.

(8,000 × 6 × 3) ÷ 100. Answer: ₹1,440

Q2. At what rate of simple interest will a sum double in 8 years?

Interest = P in 8 years, so R = 100 ÷ 8. Answer: 12.5%

Q3. A sum becomes 3 times itself in 10 years at simple interest. In how many years will it become 5 times?

Interest of 2P in 10 years gives R = 20%. To become 5 times, interest must be 4P: T = 4 × 100 ÷ 20. Answer: 20 years

Q4. Find the compound interest on ₹10,000 at 10% per year for 2 years.

Two-year CI = 21% (Shortcut 2). 21% of 10,000. Answer: ₹2,100

Q5. Find the compound interest on ₹16,000 at 10% per year for 3 years.

Amount = 16,000 × 1.331 = ₹21,296. CI = 21,296 − 16,000. Answer: ₹5,296

Q6. Find the difference between CI and SI on ₹5,000 at 8% for 2 years.

P × (R/100)² = 5,000 × 0.0064. Answer: ₹32

Q7. Find the difference between CI and SI on ₹10,000 at 10% for 3 years.

P × (R/100)² × (3 + R/100) = 10,000 × 0.01 × 3.1. Check: CI = ₹3,310 and SI = ₹3,000. Answer: ₹310

Q8. Find the compound interest on ₹20,000 at 10% per year, compounded half-yearly, for 1 year.

Use 5% for 2 periods: 20,000 × 1.1025 = ₹22,050. Answer: ₹2,050

Q9. A sum amounts to ₹12,100 in 2 years and ₹13,310 in 3 years at compound interest. Find the rate and the principal.

Interest in the 3rd year = 13,310 − 12,100 = ₹1,210, which is 10% of 12,100, so R = 10%. Principal = 12,100 ÷ 1.21. Answer: 10% and ₹10,000

Q10. The simple interest on a sum for 2 years at 10% is ₹1,200. Find the compound interest on the same sum at the same rate for 2 years.

P = 1,200 × 100 ÷ (10 × 2) = ₹6,000. CI = 21% of 6,000. Shortcut: CI − SI = 6,000 × 0.01 = ₹60, so CI = 1,200 + 60. Answer: ₹1,260

Q11. A sum at simple interest amounts to ₹7,200 in 2 years and ₹8,400 in 5 years. Find the principal and rate.

Interest for 3 years = ₹1,200, so ₹400 per year. Principal = 7,200 − 2 × 400 = ₹6,400. Rate = 400 × 100 ÷ 6,400. Answer: ₹6,400 and 6.25%

Q12. A sum doubles in 5 years at compound interest. In how many years will it become 8 times?

8 = 2³, so it takes 3 × 5 years (Shortcut 6). Answer: 15 years

Q13. A machine worth ₹2,00,000 loses 10% of its value every year. What is it worth after 3 years?

Depreciation uses (1 − R/100)ⁿ: 2,00,000 × 0.9 × 0.9 × 0.9. Answer: ₹1,45,800

Q14. At what rate of compound interest will ₹2,500 become ₹3,025 in 2 years?

3,025 ÷ 2,500 = 1.21 = 1.1², so 1 + R/100 = 1.1. Answer: 10%

Q15. ₹5,000 is lent partly at 5% and partly at 8% simple interest. The total interest after 1 year is ₹310. How much is lent at 5%?

Let ₹x be at 5%: 0.05x + 0.08(5,000 − x) = 310, so 400 − 0.03x = 310 and x = 3,000. Check: 150 + 160 = 310. Answer: ₹3,000 at 5% and ₹2,000 at 8%

10 Practice Questions (Answers Below)

Set a timer for 8 minutes and solve all ten without a calculator.

  1. Find the SI on ₹12,000 at 5% for 4 years.
  2. At what rate of SI will a sum double in 10 years?
  3. Find the CI on ₹5,000 at 20% for 2 years.
  4. Find the difference between CI and SI on ₹15,000 at 4% for 2 years.
  5. In how many years will a sum triple at 12.5% SI?
  6. Find the CI on ₹8,000 at 10% per year, compounded half-yearly, for 1 year.
  7. A sum becomes ₹9,680 in 2 years at 10% CI. Find the principal.
  8. A sum triples in 4 years at CI. In how many years will it become 9 times?
  9. The SI on a sum for 3 years at 8% is ₹960. Find the principal.
  10. The difference between CI and SI on a sum for 3 years at 10% is ₹62. Find the principal.

Answers

QAnswerQuick method
1₹2,40012,000 × 5 × 4 ÷ 100
210%100 ÷ 10
3₹2,200Two-year rate: 40 + 4 = 44%
4₹2415,000 × 0.04²
516 years2 × 100 ÷ 12.5
6₹8208,000 × 1.05² − 8,000
7₹8,0009,680 ÷ 1.21
88 years9 = 3², so 2 × 4
9₹4,000960 × 100 ÷ 24
10₹2,00062 ÷ (0.01 × 3.1)

Scored 8 or more? You are ready for mixed sets. Scored less? Revise Shortcuts 2, 3 and 5, which cover the most common question types.

Common Mistakes and How to Avoid Them

  • Using SI when the question says compound. Read the question twice. "Compounded annually" means CI.
  • Forgetting to adjust for half-yearly compounding. Halve the rate and double the periods. Using the yearly rate for 2n periods is a very common error.
  • Answering with the amount instead of the interest. If the question asks for CI, subtract P from A.
  • Using CI rules for multiplying with SI. With SI, doubling time adds up (8, 16, 24 years). With CI, it multiplies (2, 4, 8 times).
  • Expanding powers by hand. Use the multiplier table: 1.21, 1.331, 1.44, 1.728.

How to Practise This Topic in One Week

  1. Day 1: Learn the SI and CI formulas and the multiplier table until you can recall them instantly.
  2. Day 2: Practise 20 basic SI questions, including finding rate, time and principal.
  3. Day 3: Practise 20 basic CI questions using Shortcuts 1 and 2.
  4. Day 4: Practise CI − SI difference questions for 2 and 3 years.
  5. Day 5: Practise doubling, multiplying, depreciation and half-yearly questions.
  6. Day 6: Take timed sets of 10 questions in 8 minutes.
  7. Day 7: Mix interest with percentage, ratio and time and work questions.

Section patterns change between hiring seasons, so check the latest pattern for your target company. Our TCS Aptitude Test Pattern guide is a useful reference.

Frequently Asked Questions

What is the difference between simple and compound interest?

Simple interest is calculated only on the original principal. Compound interest is calculated on the principal plus the interest already earned, so it grows faster.

What is the shortcut for the difference between CI and SI for 2 years?

CI − SI = P × (R/100)². For 3 years, it is P × (R/100)² × (3 + R/100).

Are simple and compound interest ever equal?

Yes. For one year with yearly compounding, SI and CI are equal. For two or more years, CI is always larger.

How do I calculate half-yearly compound interest?

Halve the yearly rate and double the number of years, then use the normal CI formula.

In how many years does a sum double at simple interest?

Time to double = 100 ÷ R years. For example, at 10% SI, a sum doubles in 10 years.

Final Word

Interest questions reward formula recall more than calculation. Learn the multiplier table and the seven shortcuts, practise the 15 solved questions, and these become some of the fastest marks in your aptitude test.

Continue your aptitude preparation with Percentage Shortcuts, Ratio and Proportion, Time and Work and our complete Aptitude Test Preparation Tips guide.

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