Interview Q&A / Aptitude

1. What is the difference between simple interest and compound interest?

   Simple interest is calculated only on the original principal, so it is the same every year (SI = P x R x T / 100). Compound interest is calculated on the principal plus the interest already earned, so it grows every year (A = P x (1 + R/100)^T). For 2 years, the difference is P x (R/100)^2.

   BeginnerIn-depth4 min read
2. What is the compound interest on ₹10,000 for 1 year at 10% per annum, compounded half-yearly?

   ₹1,025. Half-yearly compounding means 5% per half-year for 2 periods: 10,000 x 1.05 x 1.05 = ₹11,025, so CI = ₹1,025, which is ₹25 more than yearly compounding.

   BeginnerQuick answer1 min read
3. What is the difference between compound interest and simple interest on ₹5,000 for 2 years at 8% per annum?

   ₹32. For 2 years the difference is P x (R/100)^2 = 5,000 x 0.08 x 0.08 = ₹32. It is the interest earned in year 2 on year 1's interest.

   BeginnerQuick answer1 min read