COMPOUND INTEREST
- In case of compound interest, amount for the first year becomes the principal for the second year, amount for the second year becomes principal for the third year and so on..........
Problems :
1) Find the compound interest on Rs. 5000 for 2 years at 10% per annum ?
solution :
P CI
------ -------
100 21
5000 ? (answer : 1050)
CI = A - P
by using above formula, A = 121
P = 100
CI = 121 - 100
CI = 21 (this is for principal - 100)
CI = ? (for principal - 5000)
CI = 21 * 50 = 1050
now try to solve these
2) A sum of Rs. 1250 is lent for 2 years at 4% per annum compound interest. Find the amount ?
answer : Rs. 1352
3) Find the compound interest on Rs. 8000 for 3 years at 5% per annum ?
answer : Rs. 1261
4) A sum of Rs. 3000 is lent for 3 years at 10% per annum compound interest. Find the amount?
solution : Principal Amount
------------ ------------
100 133.1000
3000 ? (answer : 3993)
given,
10% for 3 years
gives ----> 110 * 110 * 110
Amount = 133.1000
trick :
for multiplication with 2 numbers (i.e for 2 years)keep the decimal point
before 2 digits
example : 110 * 110
gives -----> 12100
hence can be written as, 121.00 (which is 121)
for multiplication with 3 number (i.e for 3 years) keep the decimal point
before 4 digits.
example : 110 * 110 * 110
gives ------> 1331000
hence can be written as, 133.1000 (which is 133.1)
now for the above question the answer is,
Amount (A) = 133.1000
CI = A - P
CI = 133.1000 - 100
CI = 33.1
by using horizontal n vertical cancellation in the above the required answer is,
30 * 133.1 = 3993
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