Module 1 · Arithmetic
Chapter 7: Compound Interest
Arithmetic
4 topics
What this chapter covers
The 4 topics below make up Compound Interest on the CAT. Click any topic to open its notes, examples and practice test.
Study material & tests
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Formula Reference Sheet
This chapter
Core compound interest
| Amount (annual compounding) | A = P(1 + r/100)ⁿ |
|---|---|
| Compound interest | CI = A − P = P[(1 + r/100)ⁿ − 1] |
| Half-yearly compounding | A = P(1 + r/200)^(2n) |
| Quarterly compounding | A = P(1 + r/400)^(4n) |
| Depreciation (value falls r%/yr) | A = P(1 − r/100)ⁿ |
CAT power-tools
| CI − SI for 2 years | P(r/100)² |
|---|---|
| CI − SI for 3 years | P(r/100)²·(3 + r/100) |
| SI for n years | SI = P·r·n/100 |
| Population after n years | P₀(1 + r/100)ⁿ (growth) ; P₀(1 − r/100)ⁿ (decline) |
| Equal yearly instalment (n=2) | each = A / [(1+r/100) + (1+r/100)²] |
CAT reference
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