Find the compound interest on Rs 20200 at 6 percent per annum for 4 years

Compound Interest (CI) is interest calculated on both the principal amount and the accumulated interest from previous periods. Simple Interest (SI) is calculated only on the principal. CI formula: A = P(1 + r/n)^(nt). CI gives more interest than SI for the same principal and rate. Both are important topics for SSC CGL, Bank PO, and CAT exams.

Compound Interest Formula: A = P(1 + R/100)^n where A = Final Amount, P = Principal, R = Annual Rate of Interest, n = Number of years. CI = A - P = P[(1 + R/100)^n - 1]. For half-yearly compounding: A = P(1 + R/200)^(2n). For quarterly: A = P(1 + R/400)^(4n). This formula is essential for SSC CGL and banking aptitude tests.

Annual Compounding: Interest added once a year. Half-yearly Compounding: Rate halved (R/2), time doubled (2n). Quarterly Compounding: Rate quartered (R/4), time quadrupled (4n). Monthly Compounding: Rate divided by 12, time multiplied by 12. More frequent compounding means more interest earned. Understanding this helps solve CI questions in SSC and Bank PO exams.

For half-yearly CI: A = P(1 + R/200)^(2n). Example: P = 10000, R = 10% per annum, n = 2 years. A = 10000(1.05)^4 = 12155. CI = 12155 - 10000 = Rs. 2155. This type of calculation is common in SSC CGL Tier-2 and Bank PO quantitative aptitude sections.

Shortcuts for CI problems: For 2 years CI = SI + SI(R/100), Difference between CI and SI for 2 years = P(R/100)^2, Use net percentage concept for multi-year problems, Remember if rate is 10% CI for 2 years is 21% not 20%, Successive percentage approach helps. Memorize these tricks for quick solving in SSC CGL and IBPS PO exams.