Focus Topic: Simple Interest (Arithmetic/Commercial Mathematics)

CAT Simple Interest Shortcuts that you can use to solve CAT Simple Interest Questions

Well, in the first article for Simple Interest and the previous prep-plan post, we explored the basic definition and formula for Simple Interest. Even though most CAT Simple Interest questions can be solved with the help of the basics for this topic, it is important that you learn some CAT Simple Interest shortcuts for this topic as these will greatly help you reduce your problem-solving time for this topic. In this short article, we explore one such shortcut that you can use effectively for this topic.
Shortcut for Simple Interest Problems
One simple formula that you can use for Simple Interest questions is:
If the interest on a sum of money is 1/p of the principal, and the number of years is equal to the rate of interest, then rate can be calculated using the formula: (√100/p)
Let’s take up an example to understand how this shortcut works:
Sample Question: The interest on a sum of money is 1/25 of the principal, and the number of years is equal to the rate of interest. What is the rate percent?

Solution: Using the above concept:
R= (√100/p)
R= (√100/25)
R= 2%
The above illustrates one shortcut that you can use for Simple Interest problems. We have highlighted many such tricks that you can use in the ‘Simple Interest: Tips, Tricks and Results’ articles given below. Remember, the purpose of these articles is to provide you results that you can use directly use for solving questions. It is not necessary that you memorize all these results given in these articles and you can be selective on the basis of your learning requirements.

Simple Interest: Concepts and Exercises
Simple Interest: Tips, Tricks & Results-1
Simple Interest: Tips, Tricks & Results-2
Simple Interest: Tips, Tricks & Results Exercise-1
Simple Interest: Tips, Tricks & Results Exercise-2

Simple Interest: Topic Tests
Simple Interest Test-3
Simple Interest Test-4

Additional Mathematics Resources:
Arithmetic Level-wise Test: Level-1 Test-6
Basic Maths: Test-6

Logical Reasoning and Data Interpretation: Prep Resources
Data Interpretation: DI Level-1: Set 6
Logical Reasoning: LR Level-1: Set 6
Puzzle: Puzzle-6

CAT Question a day

Quantitative Aptitude Question of the day

CAT Question a Day

A sum of money becomes Rs 6000 in three years and Rs 8000 in further 5 years when invested at simple interest. Find the rate percent per annum.

a. 7.5%
b. 8.33%
c. 9.75%
d. 5.67%

Answer and Explanation

Option b


The interest for 5 years = Rs 2000

So, the interest for one year = Rs 400

Hence, the interest for 3 years = Rs 1200

So, in the amount of first 3 years, the Simple Interest = Rs 1200

Hence, the principal = 6000 – 1200 = Rs 4800

The rate percent =  (400/4800) x 100 = 8.33%