Compound Interest

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COMPOUND

INTEREST

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Compound interest is calculated on the principal and

the interest for the previous

period. The principal amount increases with every time

period, as the interest

payable is added to the principal. This means interest is not only earned on the

principal, but also on the

principal, but also on the interest of the previous time periods. So

interest of the previous time periods. So

that the

compound interest calculated is more than the simple

interest on the same

amount of money deposited.

Interest is generally calculated on a yearly basis. Sometimes, it can

be compounded

more than once within a year. It can be compounded half yearly, which means

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BASIC FORMULAE

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When interest is compounded annually When interest is compounded annually

When interest is compounded half yearly When interest is compounded half yearly

 =   = [[   ]]    =   = [[ //  ]]   _{ = }_{ = }_[_[__   ]]  

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4 When interest is compounded monthlyWhen interest is compounded monthly   = = [[

/ /  ]]   _{ = }_{ = }_[_[__   ]]  

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SHORT TRICKS

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When interest is r1% for 1st year, When interest is r1% for 1st year,

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Start Free Trial Cancel Anytime. 12 12 SOLUTION SOLUTION A man borrows Rs.21000 at

A man borrows Rs.21000 at 10% compound interest. How much he has to pay 10% compound interest. How much he has to pay annually at the end of annually at the end of

each year to settle his loan in two years?

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SOLUTION SOLUTION

Find the compound interest on Rs.6000 at 10%

Find the compound interest on Rs.6000 at 10% per annum for 1.5 years when tper annum for 1.5 years when the interest ishe interest is

compounde

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SOLUTION SOLUTION

At what rate per annum will Rs.32000 yield a compound interest of Rs.5044 in 9 months interest being

compounde

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SOLUTION SOLUTION

A sum of money on compound interest amount to Rs.10648

A sum of money on compound interest amount to Rs.10648 in 3 years and Rs.9680 in 3 years and Rs.9680 in 2 years. Findin 2 years. Find

the rate of interest per

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SOLUTION SOLUTION

What is the difference between compound interest on Rs.5000 for

What is the difference between compound interest on Rs.5000 for 1.5 years at 1.5 years at 4% per annum according as the4% per annum according as the

interest is compounded yearly or half yearly?

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17 The difference between the simple interest and compound interest on a certain sum of money for The difference between the simple interest and compound interest on a certain sum of money for 2 years 2 years atat 4% per annum is Rs.4. Find the

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18 On a certain sum of money the On a certain sum of money the difference between the compound interest for a year, payable half difference between the compound interest for a year, payable half yearly and the simple interest for a year is Rs.180. If the rate of interest in both the cases is 10%

yearly and the simple interest for a year is Rs.180. If the rate of interest in both the cases is 10%

then find the sum.

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19 The difference between simple interest and compound interest on a certain sum of money for 2 The difference between simple interest and compound interest on a certain sum of money for 2 yearsyears at 4% per annum is

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20 If the compound interest on a certain sum of If the compound interest on a certain sum of money for 2 years money for 2 years at 12.5% per annum is Rs.510, at 12.5% per annum is Rs.510, find the simplefind the simple interest on the same sum at the same rate

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21 The compound interest on a certain sum of money invested for 2 The compound interest on a certain sum of money invested for 2 years at 5% per years at 5% per annum is Rs.32annum is Rs.32 find the simple interest on the same sum at

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