Simple and Compound Interest for CUET UG GAT 2026: Formulas, Tricks, Important MCQs with Answers,Solutions, & Shortcuts
Introduction: Simple and Compound Interest for CUET UG GAT 2026
Simple and Compound Interest for CUET UG GAT 2026: Simple and Compound Interest is one of the most important and frequently asked topics in Quantitative Aptitude for CUET UG GAT 2026, banking, SSC, and other competitive exams.
Questions from this topic test your understanding of:
- Percentage
- Ratio and Proportion
- Profit and Loss
- Time and Money calculations
Students who master Simple and Compound Interest can solve questions quickly using formulas and short tricks, which significantly improves exam performance.
What is Simple Interest?
Simple Interest (SI) is the interest calculated only on the original principal amount for a fixed period of time.
Formula of Simple Interest
Simple Interest = (Principal × Rate × Time) / 100
SI = (P × R × T) / 100
Where:
- P = Principal
- R = Rate of Interest
- T = Time
Amount Formula
Amount = Principal + Simple Interest
What is Compound Interest?
Compound Interest (CI) is the interest calculated on both the principal and the previously earned interest.
It is commonly used in:
- Bank deposits
- Loans
- Investments
- Savings accounts
Formula of Compound Interest
CI = P (1 + R/100)^T − P
Where:
- P = Principal
- R = Rate
- T = Time
Difference Between Simple and Compound Interest
| Feature | Simple Interest | Compound Interest |
|---|---|---|
| Interest Calculation | On Principal only | On Principal + Interest |
| Growth | Linear | Exponential |
| Used In | Short-term loans | Investments, banking |
| Formula | PRT/100 | P(1+R/100)^T |
Short Tricks to Solve Simple and Compound Interest Questions
Trick 1: Simple Interest Shortcut
SI for 1 year = P × R / 100
For multiple years:
SI = SI for 1 year × Time
Trick 2: Compound Interest for 2 Years Shortcut
CI = P (R/100)²
This shortcut is very useful in exams.
Trick 3: Difference Between CI and SI for 2 Years
Difference = P (R/100)²
This is a very common exam question.
Trick 4: Growth Shortcut
If rate is same every year:
Amount = P (1 + R/100)^T
Common Patterns of Simple and Compound Interest Questions in CUET
Most exam questions follow predictable patterns.
Pattern 1: Find Simple Interest
Given:
Principal
Rate
Time
Find:
Simple Interest
Pattern 2: Find Compound Interest
Given:
Principal
Rate
Time
Find:
Compound Interest
Pattern 3: Difference Between SI and CI
Very common in CUET UG GAT exams.
Pattern 4: Find Principal
Given:
Interest
Rate
Time
Find:
Principal
Pattern 5: Find Rate
Given:
Principal
Interest
Time
Find:
Rate
MCQs on Simple and Compound Interest for CUET UG GAT 2026
Q 4351) A sum of ₹5000 is invested at 10% per annum for 2 years at simple interest. Find the interest.
(A) ₹900
(B) ₹1000
(C) ₹1100
(D) ₹1200
Answer : (B) ₹1000
Step-by-step Solution
SI = PRT / 100
= 5000 × 10 × 2 / 100
= 1000
Q 4352) Find the compound interest on ₹2000 at 10% per annum for 2 years.
(A) ₹400
(B) ₹410
(C) ₹420
(D) ₹430
Answer: (C) ₹420
Step-by-step Solution
Amount = 2000 (1.1)²
= 2000 × 1.21
= 2420
CI = 2420 − 2000
= 420
Q 4353) Find the difference between compound interest and simple interest on ₹1000 at 10% per annum for 2 years.
(A) ₹10
(B) ₹12
(C) ₹15
(D) ₹18
Answer: (A) ₹10
Step-by-step Solution
Difference = P (R/100)²
= 1000 × (10/100)²
= 10
Q 4354) A sum becomes ₹1210 in 2 years at 10% compound interest. Find the principal.
(A) ₹850
(B) ₹970
(C) ₹1000
(D) ₹1050
Answer: (C) ₹1000
Step-by-step Solution
P (1.1)² = 1210 ; or P 1.21 = 1210
P = 1000
Q 4355) At what rate percent per annum will ₹4000 amount to ₹4840 in 2 years compound interest?
(A) 8.5%
(B) 9%
(C) 9.5%
(D) 10%
Answer: (D) 10%
Step-by-step Solution
4840 / 4000
= 1.21
(1 + R/100)²
= 1.21
R = 10%
Why S I and C I MCQs Are Important for CUET UG GAT 2026
S I and C I is a high-weightage topic in CUET UG GAT exams.
Reasons
- Frequently asked in exams
- Easy scoring topic
- Formula-based questions
- Improves calculation speed
- Important for aptitude section
Students who practice this topic regularly can easily score atlease 5 marks in CUET exams.
Internal Links
Percentage – Complete Guide for CUET UG GAT 2026
Ratio and Proportion Questions for CUET UG GAT 2026 – Formulas, Tricks, MCQs with Solutions
Profit and Loss Formulas, Tricks and MCQs for CUET UG GAT 2026
Average for CUET UG GAT 2026 – Formula, Tricks, MCQs and Practice Questions
CUET2026-Time and Work-22/02/2026
FAQs
Q1: What is the formula of S I?
Simple Interest formula is:
SI = PRT / 100
Q2: What is the formula of C I?
CI = P (1 + R/100)^T − P
Q3: Which is more important for CUET UG GAT exam, SI or CI?
Both are equally important in CUET exams.
Q4: Is C I difficult?
No. It becomes easy when formulas and shortcuts are used.
Q5: How many questions come from S I and C I CUET UG GAT exam?
Usually:
2 to 3 questions
Conclusion
Simple and Compound Interest is one of the most important topics for CUET UG GAT 2026 preparation. With proper understanding of formulas, shortcuts, and question patterns, students can solve problems quickly and accurately.
Regular practice of MCQs and using short tricks will help students improve speed, accuracy, and exam confidence.
Master this topic and you can significantly increase your CUET score.
Thank you for reading the post.
Authored and published by Vimal Kumar Tulsyan
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About the Author
Vimal Kumar Tulsyan is the Founder of CUET NOW, an educational platform focused on CUET UG preparation. He has more than 10 years of teaching experience in Reasoning and General Aptitude.
His mission is to make CUET preparation simple, reliable, and accessible for every student.
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