Simple & compound interest, discount and partnership

Key Points at a Glance

1. 1

   Syllabus scope: this topic belongs to the 2026 CET Senior Secondary Logical Reasoning and Mathematics block, which lists profit and loss, percentage, simple interest, compound interest, and ratio-proportion.

2. 2

   Simple interest is calculated on the original principal: SI = (P x R x T) / 100; amount = P + SI.

3. 3

   If the rate is annual, convert months into years before applying the interest formula; 6 months = 1/2 year and 9 months = 3/4 year.

4. 4

   Compound interest adds interest to the amount after every compounding period: A = P(1 + R / 100)^n for annual compounding; CI = A - P.

5. 5

   For half-yearly compounding, use half the annual rate and twice the number of years; for quarterly compounding, use one-fourth the annual rate and four times the number of years.

6. 6

   Discount is calculated on marked price, while profit or loss is calculated on cost price; mixing these bases is the most common error.

7. 7

   Successive discounts or percentage changes must be applied one after another; a 20% discount followed by 10% discount gives 28% effective discount, not 30%.

8. 8

   In partnership, divide profit or loss in the ratio of capital x time; subtract any fixed working-partner salary or commission first only when the question says it is paid before sharing profit.