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SSC CGL Compound Interest

Study Material — 31 PYQs (2018–2022) · Concept Notes · Shortcuts

SSC CGL Compound Interest is a frequently tested subtopic — 31 previous year questions from 2018–2022 papers are included below with concept notes, key rules and shortcut tricks.

31 PYQs

2018–2022

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Previous Year Questions

SSC CGL Compound Interest — Past Exam Questions

31 questions from actual SSC CGL papers · all shown free · click option to reveal solution

Exam Q 12022Previous Year Pattern

A principal becomes ₹10,800 in 2 years at 20% per annum compound interest. What is the principal?

Exam Q 22022Previous Year Pattern

₹5,000 is invested at 20% per annum compound interest. What is the compound interest earned in 2 years?

Exam Q 32022Previous Year Pattern

At what rate per annum will ₹6,000 become ₹7,260 in 2 years at compound interest?

Exam Q 42022Previous Year Pattern

The compound interest on ₹4,000 at 50% per annum for 2 years is:

Exam Q 52022Previous Year Pattern

A sum of ₹8,000 is invested at 10% per annum compound interest. What will be the amount after 2 years?

Exam Q 62022Previous Year Pattern

At what rate per annum will ₹5,000 amount to ₹6,050 in 2 years at compound interest?

Exam Q 72022Previous Year Pattern

The compound interest on ₹4,000 at 5% per annum for 2 years is how much more than the simple interest for the same period?

Exam Q 82020Previous Year Pattern

A sum of money becomes ₹4,840 after 2 years at 10% per annum compound interest. What is the principal amount?

Exam Q 92018Previous Year Pattern

Find the compound interest on ₹8,000 at 10% per annum for 2 years, compounded annually.

Exam Q 102022Previous Year Pattern

₹12,000 is invested at 25% per annum compound interest. What will be the amount after 1 year?

Exam Q 112018Previous Year Pattern

A sum of ₹8,000 is invested at compound interest at 10% per annum for 2 years. What is the compound interest earned?

Exam Q 122022Previous Year Pattern

The difference between compound interest and simple interest on a sum for 2 years at 5% per annum is ₹50. What is the principal?

Exam Q 132022Previous Year Pattern

A principal becomes ₹2,420 after 2 years at 10% per annum compound interest. What was the original principal?

Exam Q 142022Previous Year Pattern

The compound interest on ₹5,000 for 2 years at a certain rate per annum is ₹1,050. What is the rate of interest per annum?

Exam Q 152022Previous Year Pattern

A principal amount doubles itself in 5 years at compound interest. In how many years will it become 8 times itself at the same rate?

Exam Q 162022Previous Year Pattern

A sum of ₹8,000 is invested at 10% per annum compound interest. What will be the amount after 3 years?

Exam Q 172022Previous Year Pattern

At what rate per annum will ₹12,000 amount to ₹14,520 in 2 years at compound interest?

Exam Q 182022Previous Year Pattern

A sum of money doubles itself in 5 years at compound interest. In how many years will it become 8 times at the same rate?

Exam Q 192022Previous Year Pattern

A sum of money becomes ₹9,680 after 2 years at 10% per annum compound interest. What is the principal amount?

Exam Q 202022Previous Year Pattern

The compound interest on ₹5,000 at 8% per annum for 2 years is how much more than the simple interest for the same period?

Exam Q 212020Previous Year Pattern

A sum of money becomes ₹9,680 after 2 years at a certain rate of compound interest per annum. If the same sum becomes ₹10,648 after 3 years at the same rate, find the principal amount.

Exam Q 222020Previous Year Pattern

A sum of money becomes ₹9,680 after 2 years and ₹10,648 after 3 years when invested at compound interest compounded annually. What is the principal amount?

Exam Q 232022Previous Year Pattern

A principal amount doubles in 5 years at compound interest. In how many years will it become 8 times at the same rate?

Exam Q 242022Previous Year Pattern

A certain sum becomes 4 times itself in 8 years at compound interest. In how many years will it become 8 times itself at the same rate?

Exam Q 252022Previous Year Pattern

A man invests ₹50,000 at 10% p.a. compound interest for 3 years, but the interest is compounded half-yearly. He then invests the entire amount (principal + interest) at 8% p.a. simple interest for 2 years. What is his total gain?

Exam Q 262022Previous Year Pattern

A principal amount is invested at 20% per annum compound interest. If the compound interest earned in the 2nd year is ₹2,400, what is the compound interest earned in the 3rd year?

Exam Q 272022Previous Year Pattern

A sum of money becomes ₹9,680 after 2 years and ₹10,648 after 3 years when invested at compound interest. Find the principal amount.

Exam Q 282022Previous Year Pattern

A sum of ₹12,000 is invested at compound interest. If the amount becomes ₹13,200 after 1 year and ₹14,520 after 2 years, what is the rate of interest per annum?

Exam Q 292022Previous Year Pattern

A sum of money becomes ₹9,680 after 2 years and ₹10,648 after 3 years when invested at compound interest. What is the principal amount?

Exam Q 302022Previous Year Pattern

₹5,000 is invested at 20% p.a. compound interest, compounded half-yearly. What is the amount after 1.5 years?

Exam Q 312022Previous Year Pattern

The difference between compound interest and simple interest on a sum for 2 years at 10% p.a. is ₹100. What is the principal?

Concept Notes

Compound Interest— Rules & Concept

Core ConceptRead this first — the foundation of the topic

COMPOUND INTEREST — COMPLETE EXAM GUIDE ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

CORE CONCEPT — WHAT IS COMPOUND INTEREST? ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

In Simple Interest, you earn interest only on the original amount (principal). In Compound Interest (CI), you earn interest on the principal PLUS the interest already earned. This is called 'interest on interest.' Think of it like a snowball rolling downhill — it keeps getting bigger. Example in plain English: You deposit Rs 1000 at 10% per year CI. After Year 1, interest = Rs 100. Now in Year 2, interest is calculated on Rs 1100 (not Rs 1000). So CI always gives more than SI for the same rate and time (when time > 1 year).

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Key RulesCore rules you must know cold

CI > SI always (for same P, R, T when T is more than 1 year)

For 1 year, CI = SI (no difference)

Compounding can be annual, half-yearly, quarterly, or monthly

When compounding is half-yearly: Rate becomes R/2, Time becomes 2T

When compounding is quarterly: Rate becomes R/4, Time becomes 4T

Formula BlockMemorise — at least one formula appears in every paper

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Amount (A) = P x (1 + R/100)^T

Compound Interest (CI) = A - P = P x [(1 + R/100)^T - 1]

For half-yearly compounding:

A = P x (1 + R/200)^(2T)

For quarterly compounding:

A = P x (1 + R/400)^(4T)

Difference between CI and SI for 2 years:

CI - SI = P x (R/100)^2

Difference between CI and SI for 3 years:

CI - SI = P x (R/100)^2 x (R/100 + 3)

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Exam PatternsWhat examiners ask — read before attempting PYQs

— WHAT GETS ASKED ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ SSC CGL regularly asks: - Find CI or Amount after 2-3 years - Difference between CI and SI (very common!) - Half-yearly or quarterly compounding questions - Find Principal when CI and Rate/Time are given - Population growth and depreciation problems (same CI formula) - Find rate of interest when Amount and Principal are given ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ SHORTCUTS AND TRICKS ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ TRICK 1 — Effective Rate Method for 2 years: If rate = R%, then for 2 years, effective CI rate = 2R + R^2/100 percent Example: R = 10%, Effective rate = 20 + 100/100 = 21% So CI on Rs 1000 for 2 years at 10% = 21% of 1000 = Rs 210 TRICK 2 — Ratio Method: If A:B are amounts in consecutive years, growth ratio is constant. Useful when finding CI for different time periods using given data. TRICK 3 — Quick Difference Formula (2 years): CI - SI = P x (R/100)^2 This is one of the most tested shortcuts in SSC. Memorise it cold. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Worked ExampleSolve this step-by-step before moving on

1

Step 1

Use A = P x (1 + R/100)^T A = 8000 x (1 + 15/100)^2 A = 8000 x (115/100)^2 A = 8000 x 1.3225 A = Rs 10580

2

Step 2

CI = A - P = 10580 - 8000 = Rs 2580 Using Shortcut (Effective Rate): 2x15 + 225/100 = 30 + 2.25 = 32.25% CI = 32.25% of 8000 = Rs 2580. Same answer, much faster! ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ WORKED EXAMPLE 2 — CI vs SI Difference ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Question: The difference between CI and SI on Rs 5000 for 2 years is Rs 20. Find the rate of interest.

1

Step 1

Use CI - SI = P x (R/100)^2 20 = 5000 x (R/100)^2 (R/100)^2 = 20/5000 = 1/250 Wait — let us recheck: 20/5000 = 0.004 (R/100)^2 = 0.004 R/100 = 0.0632... Let us try R = 20%: 5000 x (20/100)^2 = 5000 x 0.04 = 200. Too high. Try R = 2%: 5000 x (2/100)^2 = 5000 x 0.0004 = 2. Too low. Try R = 10%: 5000 x (10/100)^2 = 5000 x 0.01 = 50. No. Actual answer: Let us set 5000 x (R/100)^2 = 20 (R/100)^2 = 20/5000 = 1/250 R^2 = 10000/250 = 40 R = root of 40 = approximately 6.32% Note: SSC sets clean numbers. A cleaner version: If difference = Rs 50, P = Rs 5000: R = 10% (because 5000 x 0.01 = 50). This is how SSC frames it. Always work backwards using the shortcut formula in such questions. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Exam TrapsCommon mistakes students make — avoid these

— THE NUMBER ONE TRAP ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Students apply annual compounding formula when the question says HALF-YEARLY compounding. If a question says 'compounded half-yearly at 10% per annum for 2 years,' many students use (1 + 10/100)^2. You must use (1 + 10/200)^(2x2) = (1 + 5/100)^4.

This single mistake can cost 2 marks. Always check the compounding frequency before writing the formula.

Key Points to Remember

CI is calculated on Principal + previously earned interest, unlike SI which uses only Principal
Formula: Amount = P x (1 + R/100)^T and CI = Amount minus Principal
For 1 year, CI equals SI — no difference regardless of rate
CI is always greater than SI for the same P, R, T when T is more than 1 year
Shortcut for 2-year CI: Effective rate = 2R + R^2/100 percent of principal
Key formula: CI minus SI for 2 years = P x (R/100)^2 — memorise this cold
Half-yearly compounding: use Rate = R/2 and Time = 2T in the standard formula
Quarterly compounding: use Rate = R/4 and Time = 4T in the standard formula
CI minus SI for 3 years = P x (R/100)^2 x (3 + R/100)
Population growth and depreciation problems use the same CI formula structure

Exam-Specific Tips

The formula for Compound Interest is CI = P x [(1 + R/100)^T - 1]
Difference between CI and SI for exactly 2 years = P x (R/100)^2
For half-yearly compounding, effective annual rate for R% = R + R^2/400 percent (not R + R^2/100)
For 10% rate over 2 years, the effective CI percentage on principal = 21% (using 2R + R^2/100)
Difference between CI and SI for 3 years = P x (R^2/10000) x (300 + R) / 100
When compounding is quarterly at R% per annum, each period rate = R/4% and total periods = 4T
CI and SI are equal only when time period T = 1 year for any principal and rate

Practice MCQs

Compound Interest — Practice Questions

28graded MCQs · easy to hard · full solution & trap analysis · showing 20 of 28

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Practice 1easy

A sum of money becomes ₹4,320 in 2 years and ₹5,184 in 3 years at compound interest. What is the principal amount?

Practice 2easy

₹5,000 becomes ₹6,050 in 2 years at compound interest. What is the rate of interest per annum?

Practice 3easy

₹12,000 is invested at 8% per annum compound interest. What will be the difference between the compound interest and simple interest for 2 years?

Practice 4easy

What is the compound interest earned on ₹5,000 at 20% per annum for 1.5 years, compounded half-yearly?

Practice 5easy

A sum of ₹8,000 is invested at 10% per annum compound interest. What will be the amount after 2 years?

Practice 6easy

A principal amount doubles itself in 5 years at compound interest. In how many years will it become 8 times at the same rate?

Practice 7easy

A sum of money becomes ₹4,840 after 2 years at 10% per annum compound interest. What is the principal amount?

Practice 8easy

At what rate per annum will ₹6,250 become ₹7,290 in 2 years at compound interest?

Practice 9easy

₹10,000 is invested at 5% per annum compound interest compounded annually. What is the compound interest earned in the 3rd year only?

Practice 10medium

₹8,000 becomes ₹9,261 in 3 years at a certain rate of compound interest per annum. What is the rate of interest?

Practice 11medium

₹5,000 is invested at 12% per annum compound interest, compounded half-yearly. What will be the amount after 1 year?

Practice 12medium

A principal amount doubles itself in 5 years at a certain rate of compound interest per annum. In how many years will it become 8 times itself at the same rate?

Practice 13medium

The difference between compound interest and simple interest on a certain principal for 2 years at 12% per annum is ₹144. What is the principal?

Practice 14medium

A sum of ₹12,000 is invested at 10% per annum compound interest. What will be the amount after 2 years?

Practice 15medium

A sum of money becomes ₹9,680 after 2 years at 10% per annum compound interest. What was the principal amount?

Practice 16medium

The compound interest on ₹12,000 at 8% per annum for 3 years is how much more than the simple interest for the same period?

Practice 17medium

A sum of money becomes ₹6,480 in 2 years and ₹7,776 in 3 years at compound interest. What is the principal and rate of interest?

Practice 18medium

The difference between compound interest and simple interest on a sum for 2 years at 8% per annum is ₹64. What is the principal?

Practice 19hard

A principal amount is invested at 5% per annum compound interest. After 3 years, it becomes ₹13,310. If the interest were compounded half-yearly instead, what would be the amount after 1.5 years?

Practice 20hard

A sum of money becomes ₹9,680 after 2 years and ₹10,648 after 3 years when invested at compound interest. Find the principal and rate of interest per annum.

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60-Second Revision — Compound Interest

Formula: A = P x (1 + R/100)^T — CI = A minus P. Write this first in every CI question.
Trap: Half-yearly means Rate becomes R/2 and Time becomes 2T — do NOT use original R and T directly.
Shortcut: CI - SI for 2 years = P x (R/100)^2 — this appears in almost every SSC paper.
Remember: For 1 year, CI = SI. For more than 1 year, CI is always greater than SI.
Trick: Effective 2-year CI rate = (2R + R^2/100)% — apply directly to principal for fast answer.
Trap: Never confuse Amount with CI — the question may ask for CI but formula gives Amount first.
Pattern: Population/depreciation problems use same CI formula — increase uses (1 + R/100)^T, decrease uses (1 - R/100)^T.

←Simple Interest Difference SI vs CI→

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