Mathematics and Statistics
Domain scope
This section tests numerical ability and basic statistical interpretation used in banking and economic data. Expect percentages, interest, ratios, averages, probability and measures of central tendency.
Core rules
- Percentage change = (new value - old value) / old value × 100. Distinguish percentage points from percent change.
- Simple interest = P × R × T / 100. Compound amount = P(1 + R/100)^T; compound interest is the amount minus P.
- Weighted average uses weights, not a simple average of subgroup averages.
- Mean = sum of values / number of values; median is the middle value after ordering; mode is the most frequent value.
- Probability = favourable outcomes / total outcomes, assuming equally likely outcomes.
- Standard deviation measures dispersion around the mean; range is maximum minus minimum.
Worked example
Rs 20,000 is invested at 10% per year for 2 years. Simple interest = 20,000 × 10 × 2 / 100 = Rs 4,000. Compound amount = 20,000 × 1.1 × 1.1 = Rs 24,200, so compound interest = Rs 4,200. The difference is Rs 200 because the second year earns interest on the first year's interest.
Traps
Do not use 10 instead of 0.10 in the compound formula. Do not apply simple interest when compounding is stated. Median requires sorting the data first. Do not average subgroup averages without weighting. In percentage change, the denominator is the original value, not the new value.