Tips To Solve CAT Simple And Compound Interest
- Fundamentals of this concept are useful in solving the questions of the other topics by assuming the unknown values as variables. Make sure to cover other inter-related concepts of CAT syllabus. All the inter-related concepts need to be covered to have a good foundation in concepts.
- Be careful of silly mistakes in this topic, as that is how students generally lose marks here. The number of equations needed to solve the given problem equals the number of variables. A linear equation is an equation which gives a straight line when plotted on a graph.
- If you are confused, enrolling in CAT online coaching will help you a long way.
- Linear equations can be of one variable or two variables, or three variables.
- Let a, b, c and d be constants, and x, y, and z are variables. A general form of a single variable linear equation is ax + b = 0.
- A general form of two-variable linear equation is ax + by = c.
- A general form of three-variable linear equation is ax + by + cz = d.
CAT Simple And Compound Interest PDF
To help CAT aspirants in their preparation, we have made a comprehensive formula PDF containing all the important linear equations that are essential. This PDF includes all the necessary formulas, techniques, and examples required to solve linear equations efficiently. Click on the link below to download the Linear equations formula PDF.
1. Linear Equations Formulae: Solving Linear Equations
For equations of the form ax + by = c and mx + ny = p, find the LCM of b and n.
Multiply each equation with a constant to make the y term coefficient equal to the LCM. Then subtract equation 2 from equation 1.
2. Linear Equations Formulae: Straight Lines
Equations with 2 variables: Consider two equations ax + by = c and mx + ny = p. Each of these equations represents two lines on the x-y coordinate plane. The solution of these equations is the point of intersection.
If : This means that both the equations have the same slope but different intercepts, and hence are parallel to each other. There is no point of intersection and no solution.
If : They have different slopes and hence must intersect at some point, resulting in a unique solution.
If : The two lines have the same slope and intercept. Hence, they are the same lines. As they have infinite points common between them, there are infinitely many solutions possible.
Question 1.

Amala, Bina, and Gouri invest money in the ratio 3 : 4 : 5 in fixed deposits having respective annual interest rates in the ratio 6 : 5 : 4. What is their total interest income (in Rs) after a year, if Bina's interest income exceeds Amala's by Rs 250?
Question 2.

A sum of money compounded annually becomes Rs. 625 in two years and Rs. 675 in three years. The rate of interest per annum is
Question 3.

Ghosh Babu deposited a certain sum of money in a bank in 1986. The bank calculated interest on the principal at 10 percent simple interest, and credited it to the account once a year. After the 1st year, Ghosh Babu withdrew the entire interest and 20% of the initial amount. After the 2nd year, he withdrew the interest and 50% of the remaining amount. After the 3rd year, he withdrew the interest and 50% of the remaining amount. Finally after the 4th year, Ghosh Babu closed the account and collected the entire balance of Rs. 11,000.
Ghosh Babu deposited a certain sum of money in a bank in 1986. The bank calculated interest on the principal at 10 percent simple interest, and credited it to the account once a year. After the 1st year, Ghosh Babu withdrew the entire interest and 20% of the initial amount. After the 2nd year, he withdrew the interest and 50% of the remaining amount. After the 3rd year, he withdrew the interest and 50% of the remaining amount. Finally after the 4th year, Ghosh Babu closed the account and collected the entire balance of Rs. 11,000.
The total interest, in rupees, collected by Ghosh Babu was:
Question 4.

A person invested a certain amount of money at 10% annual interest, compounded half-yearly. After one and a half years, the interest and principal together became Rs 18522. The amount, in rupees, that the person had invested is
Question 5.

The year, at the end of which, Ghosh Babu withdrew the maximum amount was:
Question 6.

For the same principal amount, the compound interest for two years at 5% per annum exceeds the simple interest for three years at 3% per annum by Rs 1125. Then the principal amount in rupees is
Question 7.

The year, at the end of which, Ghosh Babu collected the maximum interest was:
Question 8.

Veeru invested Rs. 10,000 at 5% simple annual interest, and exactly after two years, Joy invested Rs. 8,000 at 10% simple annual interest. How many years after Veeru’s investment, will their balances, i.e., principal plus accumulated interest, be equal?
Question 9.

The year, at the end of which, Ghosh Babu withdrew the smallest amount was:
Question 10.

Bank A offers 6% interest rate per annum compounded half yearly. Bank B and Bank C offer simple interest but the annual interest rate offered by Bank C is twice that of Bank B. Raju invests a certain amount in Bank B for a certain period and Rupa invests ₹ 10,000 in Bank C for twice that period. The interest that would accrue to Raju during that period is equal to the interest that would have accrued had he invested the same amount in Bank A for one year. The interest accrued, in INR, to Rupa is
Question 11.

The initial amount in rupees, deposited by Ghosh Babu was:
Question 12.

Anil invests some money at a fixed rate of interest, compounded annually. If the interests accrued during the second and third year are ₹ 806.25 and ₹ 866.72, respectively, the interest accrued, in INR, during the fourth year is nearest to
Question 13.

A man invests Rs.3,000 at the rate of 5% per annum. How much more should he invest at the rate of 8%, so that he can earn a total of 6% per annum?
Question 14.

Nitu has an initial capital of Rs. 20,000. Out of this, she invests Rs. 8,000 at 5.5% in bank A, Rs. 5,000 at 5.6% in bank B and the remaining amount at x% in bank C, each rate being simple interest per annum. Her combined annual interest income from these investments is equal to 5% of the initial capital. If she had invested her entire initial capital in bank C alone, then her annual interest income, in rupees, would have been
Question 15.

Gopal borrows Rs. X from Ankit at 8% annual interest. He then adds Rs. Y of his own money and lends Rs. X+Y to Ishan at 10% annual interest. At the end of the year, after returning Ankit’s dues, the net interest retained by Gopal is the same as that accrued to Ankit. On the other hand, had Gopal lent Rs. X+2Y to Ishan at 10%, then the net interest retained by him would have increased by Rs. 150. If all interests are compounded annually, then find the value of X + Y.
Question 16.

Mr. Pinto invests one-fifth of his capital at 6%, one-third at 10% and the remaining at 1%, each rate being simple interest per annum. Then, the minimum number of years required for the cumulative interest income from these investments to equal or exceed his initial capital is
Question 17.

John borrowed Rs. 2,10,000 from a bank at an interest rate of 10% per annum, compounded annually. The loan was repaid in two equal instalments, the first after one year and the second after another year. The first instalment was interest of one year plus part of the principal amount, while the second was the rest of the principal amount plus due interest thereon. Then each instalment, in Rs., is
Question 18.

Alex invested his savings in two parts. The simple interest earned on the first part at 15% per annum for 4 years is the same as the simple interest earned on the second part at 12% per annum for 3 years. Then, the percentage of his savings invested in the first part is
Question 19.

Anil borrows Rs 2 lakhs at an interest rate of 8% per annum, compounded half-yearly. He repays Rs 10320 at the end of the first year and closes the loan by paying the outstanding amount at the end of the third year. Then, the total interest, in rupees, paid over the three years is nearest to
Question 20.

Amal invests Rs 12000 at 8% interest, compounded annually, and Rs 10000 at 6% interest, compounded semi-annually, both investments being for one year. Bimal invests his money at 7.5% simple interest for one year. If Amal and Bimal get the same amount of interest, then the amount, in Rupees, invested by Bimal is
Question 21.
