Interest Formula on Compound Interest
Maths Questions Answers
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Written by: Sanjay Srivastava
B.Tech (Honours);IIT Kharagpur
PMP ; PMI USA
Class - VIII - Maths:- INDEX
1. Squares & Square Roots2. Cubes & Cube Roots
3. Exponents & Radicals
4. Profit Loss & Discount
5. Compound Interest
6. Algebraic Identities
7. Polynomials
8. Linear Equations
9. Parallel Lines
10. Types of Quadrilaterals
11. Construction of Quadrilaterals
12. Circles
13. Areas
14. Surface Areas
15. Volumes
16. Statistics
Class - VIII - Maths
Question - Type 4 -
What will be the effect on interest earned, if some amount is deposited for 3 years at a interest rate of @ 10% compounded annually and in other bank at the double rate.
Answer - 4-
a) the interest earned in first bank C.I.1 = P * [(1+R/100)^n - 1]
= p[(1+10/100)^3 -1]=p[1.331-1]= 0.331 P
b) the interest earned in second bank C.I.2 = P * [(1+R/100)^n - 1]
= p[(1+20/100)^3 -1]=p[1.728-1]= 0.728 P
You may notice that C.I.2 is more than two times of C.I.1 and this is also known as one of the power of compounding.
Question - Type 5 -
Ram invested 10000 Rs at a interest rate of 20% per annum. Find the total sum after 3 years and the interest earned every year.
Answer - 5 -
Refer Question1 at the first page.
since he has asked for the interest for every year, therefore calculating the 'Total Sum' at the end of 3rd year by compound interest method will be waste.
1st year interest = 10000 *1* 20/100 = 2000
2nd year interest = (10000+2000) *1* 20/100 = 2400
3rd year interest = (10000 + 2000 + 2400) *1* 20/100 = 2880
Note that for interest calculation the interest of previous years are added in the Principal amount.
and the total amount after 3 year = 10000 + 2000 + 2400 + 2880
= 17280
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What is Compound Interest Formula (Page 3/3)
(Contiued from page 2 )Question - Type 4 -
What will be the effect on interest earned, if some amount is deposited for 3 years at a interest rate of @ 10% compounded annually and in other bank at the double rate.
Answer - 4-
a) the interest earned in first bank C.I.1 = P * [(1+R/100)^n - 1]
= p[(1+10/100)^3 -1]=p[1.331-1]= 0.331 P
b) the interest earned in second bank C.I.2 = P * [(1+R/100)^n - 1]
= p[(1+20/100)^3 -1]=p[1.728-1]= 0.728 P
You may notice that C.I.2 is more than two times of C.I.1 and this is also known as one of the power of compounding.
Question - Type 5 -
Ram invested 10000 Rs at a interest rate of 20% per annum. Find the total sum after 3 years and the interest earned every year.
Answer - 5 -
Refer Question1 at the first page.
since he has asked for the interest for every year, therefore calculating the 'Total Sum' at the end of 3rd year by compound interest method will be waste.
1st year interest = 10000 *1* 20/100 = 2000
2nd year interest = (10000+2000) *1* 20/100 = 2400
3rd year interest = (10000 + 2000 + 2400) *1* 20/100 = 2880
Note that for interest calculation the interest of previous years are added in the Principal amount.
and the total amount after 3 year = 10000 + 2000 + 2400 + 2880
= 17280
© funandhobby.com ( What is Compound Interest Formula)