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Compound and Simple Interest

1) The document discusses compound interest and simple interest concepts. It provides 7 examples calculating interest using formulas for compound interest, simple interest, and the differences between them. 2) The examples calculate total amounts, interest earned, principal amounts, interest rates, and differences between compound and simple interest over various time periods. 3) Formulas used include compound interest formula F=P(1+i)n, simple interest formula SI=Pni, and calculations of principal P based on interest amounts provided.

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Carl Justine C. Dungca
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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
135 views

Compound and Simple Interest

1) The document discusses compound interest and simple interest concepts. It provides 7 examples calculating interest using formulas for compound interest, simple interest, and the differences between them. 2) The examples calculate total amounts, interest earned, principal amounts, interest rates, and differences between compound and simple interest over various time periods. 3) Formulas used include compound interest formula F=P(1+i)n, simple interest formula SI=Pni, and calculations of principal P based on interest amounts provided.

Uploaded by

Carl Justine C. Dungca
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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COMPOUND AND SIMPLE

INTEREST
GROUP 2
BSCPE 2C
COMPOUND INTEREST
6. Amit deposited some money in a bank, which pays 15% interest per
annum compounded yearly. If the bank provides a simple interest instead of
compound interest, he receives Rs. 2400 after 2 years. Find the total Amount
that he received after 2 years.
Given :
i = 15% or 0.15
n=2
SI = Rs. 2400
F=?

F = P (1 + i)² F = 8000 (1 + 0.15)²


SI = Pni, SI/ni = Pni/ni, P= SI/ni F = 8000 (1.15)² = 8000 (1.3225)
2400= P = 2400 F = Rs. 10580
(2)(0.15) 0.30 E. None of these
P = 8000
7. Heeralal invests some amount every year. The annual interest rate earned
on his investment gets increased by 10%. If the yearly interest rate earned on
his investment this year was 11%, what was the yearky rate of interest
previous year?

10% (x) + x = 11% x = yearly rate of interest (previous)


0.10 (x) + x = 11%
1.10x = 11%

1.10x = 11%
1.10 1.10

X = 11%
1.10

X = 10%
D. 10%
Rs. 160000 is divided two equal parts. One part is invested in a scheme
which gives 12% interest compounded annually for two years. The other part
is invested in a scheme offering simple interest of 13% for 2 years. What is
the difference between the interest earned on the two schemes?
P = 160000 = Rs. 80000
2
i = 12% or 0.12 i = 13% or 0.13
n=2 n=2
F = P(1+i)n SI = Pni
F - P = CI Si = 80000 (2)(0.13)
F – P = P (1 + i)n – P SI = 20800
CI = P (1 + i)n – P
CI = 80000 (1 + 0.12)2 - 80000
CI = 80000 (1.12)2 – 80000
CI = 80000 (1.12544) – 80000
CI = 100352 – 80000 = 20352

CI – SI = 20352 – 20800 = 448


C. Rs. 448
40. Sunil lent some amount to Poonam for 3 years at the rate of 20% per annum
simple interest and the equal amount to Sabnam for 2 years at the rate of 25% per
annum compound interest compounded annually. At the end of time duration, the
amount received from the Pooman was Rs. 5625 more that that from Sabnam. How
much money did he lend to each?

P=? n=2
n=3 i = 25% or 0.25
i = 20 % or 0.20 Fc = P(1+ i)n
Fs = P (1 + in)
Fc = P(1 + 0.25)2
Fs = P (1+(0.20)(3))
Fc = P (1.25)2
Fs = P (1.6)
Fc = P (1.5625) = 1.5625 P
Fs = 1.6P FS = Fc + 5625
1.6P = 1.5625P + 5625
1.6P – 1.5625P = 5625
0.0375 P = 5625
0.0375 0.0375

(1) P = P = Rs. 150000


D. Rs. 150000
48. Difference between compound interest and simple interest on a certain
sum at the rate of 8% per annum for two years is Rs.4096. Find the compound
interest on that sum after three years at the rate of 12% per annum.
CI – SI = 4096 i = 8% or 0.08
CI = F – P = P (1 + i)n – (Pni) = 4096n = 2
P [(1 + i)n – 1 – (ni)] = 4096
P [(1 + 0.08)2 – 1 – (0.08)(2)] = 4096
P [(1.08)2 – 1 – 0.16] = 4096
P (1.1664 – 1.16) = 4096
P (0.0064) = 4096
0.0064 0.0064
P = Rs. 640000
CI = 640000 (1 + 0.12)3 – 640000 i = 0.12 or 12%
= 640000 (1.12)3 – 640000 n=3
= 640000 (1.404928) – 640000
= 899153.92 – 640000
CI = Rs. 259153.92
D. Rs. 259153.92
49. Asha took an educational loan of Rs. 4,00,000 from a nationalized bank
for her 2 years course. She returned half of the amount (including interest) at
the completion of her studies and remaining after 3 years from the end of her
course. If she would be charged at 7% p.a at CI during her course at 10% p.a
at CI after the completion of the course. Then what is her total interest
amount?
P = Rs. 400000 n=2
F2 = P(1 + i)n i = 7% or 0.07
F2 = 400000 (1 + 0.07)2
F2 = 400000 (1.07)2
F2 = 400000 (1.1449)
F2 = 457960

F5 = 457960 (1 + 0.10)3 n=3


2 i = 10% or 0.10
F5 = 228980 (1.10)3
F5 = 228980 (1.331)
F5 = 304772.38
Interest during course + Interest after course = Total interest amount
[F2 – P] + [F5 – F2/2] = Total interest amount
(457960 – 400000) + (304772.38 – 457960/2)
57960 + 75792.38
133752.38 = Total interest amount
B. Rs. 133752.38
50. A sum at simple interest amounts to Rs. 109760 at the rate of 8% per
annum after 12 years. Find the compound interest on that sum at the same
rate of interest after 3 years.

CI3 = ? F12 = Rs. 109760


i = 8% or 0.08
n = 12
F12 = P (1 + in)
1 + in 1 + in
P = F12 / 1 + in
P = 109760
1 + (0.08)(12)

P = 109760 = 109760
1 + 0.96 1.96
CI3 = F – P = P (1 + i)n – P n=3
CI3 = 56000 (1 + 0.08)3 – 56000
CI3 = 56000 (1.08)3 – 56000
CI3 = 56000 (1.259712) – 56000
CI3 = 70543.872 - 56000
CI3 = Rs. 14543.872
B. Rs. 14543.872
SIMPLE INTEREST

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