SBI Clerk

Simple & Compound Interest Most Expected Questions For SBI Clerk 2024 Exam

Home » SBI Clerk » Simple & Compound Interest Most Expected Questions For SBI Clerk 2024 Exam

Simple and Compound Interest For SBI Clerk 2024 Exam: Interest calculation forms a part of the crux of financial mathematics, one of the important subjects of SBI Clerk. Understanding the topic will not only help you score well but will also make your hold on basic financial transactions quite robust, which would always be helpful if you aim to have a banking career. Let’s dig deeper into the basics of simple and compound interest, essential formulas, and types of questions you can expect in SBI Clerk Prelims 2024.

What is Simple and Compound Interest

Simple Interest (SI)

This interest type is simple interest where a sum of money bears the interest charged on that sum for the period under which it has been lent or invested. The interest will not compound since the amount of principal that has acquired the interest during a specified time period is not added to the principal to earn the next amount of interest.

Where:

  • P = Principal (initial amount)
  • R = Rate of Interest per annum
  • T = Time (in years)

Compound Interest

Compound interest is the one that works both on the initial principal amount and on the interest that had already accumulated in the previous periods. This is an important concept that makes interest accumulate, over time, and generate returns much more than in the case of simple interest.

Where:

  • A = Total Amount (principal + interest) after T years
  • P = Principal
  • R = Rate of Interest per annum
  • T = Time (in years)

Simple & Compound Formula

Compound interest:
Interest = Amount – Principal

If Rs. ‘P’ is invested at a rate of ‘r%’ p.a. compounded annually for ‘t’ years, then the amount received after ‘t’ years will be = P × {1 + (r/100)}t

If the interest is not compounded annually, then

Effective rate of interest = Actual rate ÷ Number of times the interest is compounded in a year

Effective time period = Actual time period × Number of times the interest is compounded in a year

Simple interest:

If Rs. ‘P’ is invested at simple interest of ‘r%’ p.a. for ‘t’ years, then the amount received after ‘t’ years will be = P + {(P × r × t)/100}

And, the simple interest received = {(P × r × t)/100}

Relationship between simple interest (SI) and compound interest (CI):

When a principal (P) is invested at the rate of ‘r%’ p.a., then

Difference between SI and CI after two years = P × (r/100)2 

Difference between SI and CI after three years = P × (r/100)2 × {(r/100) + 3}

SBI Clerk Section Wise Free Topic Test

PracticeMock Provides a section-wise topic test including Reasoning, Quant and English sections. Candidates attempt all free resources and boost their preparation. For more details, candidates can check the table below.

SBI Clerk 2024 Free Mock TestSign Up & Attempt
SBI Clerk 2024 Free Reasoning Topic TestAttempts All Topic Test & Boost Your Performance
SBI Clerk 2024 Free Quantitative Topic TestAttempts All Topic Test & Boost Your Performance
SBI Clerk 2024 Free English Topic TestAttempts All Topic Test & Boost Your Performance
SBI Clerk Previous Year Question PaperSolve this Paper & know your Preparation Level

Simple & Compound Interest Most Expected Questions PDF

Question 1: When Rs. (x + 500) is invested at 20% p.a. compound interest, compounded annually for 2
years, the interest received is Rs. 660. Find the interest received when Rs. (x – 500) is invested at 25%
p.a. simple interest for 6 years.
A) Rs. 750
B) Rs. 840
C) Rs. 600
D) Rs. 900
E) Rs. 510

Question 2: Rs. 3200 is invested at 35% p.a. simple interest for 4 years in scheme A. The interest
received from scheme A is then invested for 2 years at 50% p.a. compound interest, compounded
annually in scheme B. Find the interest received from scheme B.
A) Rs. 5400
B) Rs. 5600
C) Rs. 5800
D) Rs. 6000
E) None of these

Question 3: Rs. 3600 is invested at 15% p.a. simple interest for 6 years. How much sum should be
invested to receive Rs. 900 less interest at same rate of simple interest and in the same duration?
A) Rs. 2500
B) Rs. 2800
C) Rs. 2600
D) Rs. 3200
E) Rs. 3000

Simple & Compound Interest Most Expected Questions PDF Link

Related Blog’s on SBI Clerk 2024 Exam

SBI Clerk Notification 2024SBI Clerk Exam Pattern 2024
SBI Clerk Syllabus 2024SBI Clerk Salary 2024
SBI Clerk Cut Off 2024SBI Clerk Previous Year Question Paper
SBI Clerk Study Plan 2024SBI Clerk Preparation Strategy 2024

Simple & Compound Interest Most Expected Questions FAQ

What is Simple Interest?

Simple Interest (SI) is the interest calculated only on the initial principal amount. It does not compound over time.

Is the Simple & compound Interest Most Expected Question pdf free?

Yes, The Simple & compound Interest Most Expected Question pdf is free of cost.

Where Can I Download Simple & compound Interest Most expected question PDF?

Candidates can check the article below & download the Simple & compound Interest Most Expected Question PDF.

Sweta Singh

I pen/write blogs to help aspirants prepare for SSC, Banking, and Engineering exams. These blogs turn out to be a one-stop destination for comprehensive information on some of the biggest competitive exams. My ultimate goal is to provide accurate and easy-to-understand information, covering topics like exam patterns, syllabus, study techniques, and more. Join me on this journey of knowledge!

Recent Posts

SSC CGL Reasoning Preparation Strategy for 2 Months, Free Resources

In this blog, we have provided the SSC CGL Reasoning Preparation Strategy for 2 Months.…

5 hours ago

SBI PO Prelims Result 2025 Out, Check Probationary Officer Result Download Link

The SBI PO Prelims result 2025 has been released on their official website. Candidates can…

6 hours ago

RRB JE CBT 2 Previous Year Paper, Download Free PDFs

In this blog, we have provided the RRB JE CBT 2 Previous Year Paper. You…

9 hours ago

CBI Credit Officer Expected Cut off 2025, Check Previous Year Trends

Check the CBI Credit Officer Expected Cut Off 2025 and review previous year trends to…

9 hours ago

Best Books for IBPS RRB PO 2025 Exam Preparation?

Looking for the Best Books for IBPS RRB PO Exam Preparation? Here are the best…

9 hours ago

IBPS RRB Clerk 2025 Study Plan For 6 Months, Check Topper Strategy

Follow this 6-month study plan for IBPS RRB Clerk 2025 exam, with targeted preparation for…

9 hours ago