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#1 2011-11-26 16:59:07
Compound Interest
1. The difference between the Simple and Compound Interest compounded yearly at the rate of 4% in two years period on a cretain amount of money is Rs 1. What is the amount?
2. The compound interest on a certain sum of money for 2 yrs at the rate of 10% per annum is Rs 420.What is the principal?
Please show how the equations are derived.
'And fun? If maths is fun, then getting a tooth extraction is fun. A viral infection is fun. Rabies shots are fun.'
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#2 2011-11-26 20:22:12
- Bob
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- Registered: 2010-06-20
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Re: Compound Interest
hi Agnishom,
I find it easiest to use the right multiplier for questions like these.
eg. If P is invested for 1 year at 4% then
So the multiplier for 4% is 1.04
Simple: the principal is multiplied by 0.04 and then by 2 (for 2 years)
and then P added on
Compound: For each year you times by 1.04 so
so
Ok to finish this off?
For part 2 :
multiplier for 10% is x 1.10
Bob
Children are not defined by school ...........The Fonz
You cannot teach a man anything; you can only help him find it within himself..........Galileo Galilei
Sometimes I deliberately make mistakes, just to test you! …………….Bob 
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#3 2011-11-27 14:15:07
Re: Compound Interest
Yes thanks
'And fun? If maths is fun, then getting a tooth extraction is fun. A viral infection is fun. Rabies shots are fun.'
'God exists because Mathematics is consistent, and the devil exists because we cannot prove it'
I'm not crazy, my mother had me tested.
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#4 2011-11-27 19:58:15
- Bob
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- Registered: 2010-06-20
- Posts: 10,649
Re: Compound Interest
You're welcome.
Bob
Children are not defined by school ...........The Fonz
You cannot teach a man anything; you can only help him find it within himself..........Galileo Galilei
Sometimes I deliberately make mistakes, just to test you! …………….Bob
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