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*********Simple interest and Compound interest*********
| Simple interest:Before explaning simple interest let's understand the term Principal,Rate and Time. Principal:The amount or sum of money which is provided as a loan or the sum of money deposited to bank. or sum of money deposited on a bank at certain period of time is called Principal Rate: Rate is defined as percentage of Principal at which interest is deducted or deposited at fixed time period. Time:The fixed time period is called time. Amount:The total sum of Principal and interest is called Amount. Interest:The money which a person or company pays is called interest. Let S.I=simple interest, P=Principal,r = rate,t=Time period S.I= (p*r*t)/100 T= (S.I*100)/(p*r) r=(S.I*100)/(p*t) |
Compound interest is the addition of interest to the principal sum of a loan or deposit of next period. Let compound interest be C.I, C.I=p{(1+r/100)^n -1} A=p(1+r/100)^n |
********CHECK OUT SOLVED EXAMPLES********
| Q: Suresh has bought one T.V at Rs.15000 in loan from a bank at a rate of 11.4% per annum by paying simple interest Rs.4500.Find the time period to complete the loan
Ans:T=(I*100)/(P*R)
=25/9=2years7months check the answer!!!
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Q 2:Find the interest and amount paid by a customter having sum of money Rs.986000 for 5 years at the rate of 9% per annum. Ans:I=(P*R*T)/100
=(986000*9*5)/100 =9860*45 = Rs.443700 check the answer!!! |
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Q3:Suresh bought a scooter at Rs.45,678 at a loan of 10% per annum from a bank,find the compound interest paid by Suresh up to 3 years. check the answer!!! |
Q 5:Find the rate percentage,Mohan took the loan of Rs.52000 by paying simple interest Rs.5000 per annum for 13 years.
Ans:r=(I*100)/(p*t)=(5000*100)/(52000*5) =5% check the answer!!! |
Q 6:Find the compound interest interest and amount paid by a customter having sum of money Rs.986000 for 5 years at the rate of 9% per annum. Ans:I=(P*R*T)/100
=(986000*9*5)/100 =9860*45 = Rs.443700 check the answer!!! |
********TRY BY YOURSELF********
Q:Calculate the rate percent per annum of simple interest Rs.168 is paid on 700 for 18 months.