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1.MONEY MATH 
Appu’s father was attracted by it and bought a TV from them. But Babu’s father decided to take out a 
loan from the local co-operative bank for buying a TV. They wanted details of the price.He made 
enquiries and found that the price of the advertised TV was 9000 rupees. He took out a loan from a 
bank for this amount at 12% interest and bought the TV How much money should Raju’s father pay in 
one year? 
Babu’s father paid off the bank loan in one year. 
How much money did he pay the bank? 
Who spent more? 
CONCESSION AND PENALTY 
Joseph and Thomas took out an agricultural loan of 20,000 rupees each from a bank at 10% rate of 
interest. The bank allows 4% concession on the interest, if the loan is paid back in two years. If the 
amount is not paid back within this period, they charge an additional 1% penal interest. Joseph paid 
all dues on the exact day of completing two years. But Thomas could do it only the next day. How 
much did each pay back? 
Let’s first compute how much Joseph paid: 
Amount of loan = Rs. 20,000 
Rate of interest = 10% 
Concession = 4% 
Actual rate of interest = 6% 
Interest = Rs. 2400 
What about Thomas? 
Amount of loan = Rs. 20,000 
Rate of interest = 10% 
Since he couldn’t pay back in time, he doesn’t get the concession on interest rate; and he has to pay 
penal interest as well. So, what is the rate of interest for him? 
Actual rate of interest = 11% 
Interest = Rs. 4400
Total amount paid = 20000 + 4400 
= Rs. 24400 
See how much more he had to pay, just for one day’s delay! 
BANKS AND FINANCE COMPANIES 
Jayan and Binny each took out a loan of 15,000 rupees; Jayan from a private finance company which 
charges 5 rupees per month for 100 rupees as interest and Binny from a nationalized bank charging 
12% compound interest. How much should each pay back after two years?What is the annual rate of 
interest in the case of the financial company? So, what is the total amount Jayan has to repay after 
two years? 
In the case of the bank, interest is compounded. 
Principal for the first year = Rs. 15000 
Interest for the first year = . . . . . . . . . 
Principal for the second year = . . . . . . . . . 
Interest for the second year = . . . . . . . . . 
Amount to be repaid = . . . . . . . . . 
What is the difference in the amounts Jayan and Binny has to repay? 
A COMPUTATIONAL TRICK 
Let’s see how we can compute the total amount including interest, using algebra. We denote the 
principal (amount invested or loan taken out) by p, the rate of compound interest by r% and compute 
the total amount including interest to be paid back after n years. (see the lesson, Money for Money! in 
the Class 7 textbook.) 
Principal for the first year = p 
Interest for the first year = p *r/100 
Continuing like this, the total amount A, including interest after n years is given by 
A= 푷 ∗ (ퟏ + 
푹 
ퟏퟎퟎ 
)풏 
What if it is simple interest, instead of compound interest?
A= 푷 ∗ (ퟏ + 
풓풏 
ퟏퟎퟎ 
) 
Usha deposited 8000 rupees in a bank, which gives 
compound interest at 7%. How much would she get 
back after 3 years? 
Let’s compute using our formula: here the principal is 
3000 rupees, rate of interest is 7% and the number of 
years is 3. 
Total amount including interest 
1073 
1000 
=8* 
Let’s find out 
$ Mahadevan took out a loan of 5,000 rupees from abank, which charges compound interest. The rate 
of interest was 10% for the first year, but it was increased to 12% during the second year. How much 
money should Mahadevan pay at the end of two years to settle the debt? 
$ Compute the compound interest for 25,000 rupees at 9%, for 2 years. 
$ Verghese borrowed 16,000 rupees from a bank at 8% compound interest. After 2 years, the interest 
rate was lowered to 6%. What is the total amount that Verghese has to repay at the end of 3 years? 
CHANGING TIMES 
Ravi took out an agricultural loan of 12,500 rupees from the co-operative bank. They charge 8% 
interest. How much should Ravi pay back after 6 months? 
Amount of loan = Rs. 12,500 
Rate of interest = 8% 
Period = 6 months 
Now can’t you do the following problems on your own? 
$ Rahim, Johny and Gopu deposited 10,000 rupees each, under different schemes, in a bank which gives
8% interest. Rahim gets simple interest, Johny gets interest compounded half-yearly and Gopu gets 
interest compounded quarterly. Compute the total amount each 
of them gets back after one year and compare these amounts. 
$ A person deposited 20,000 rupees in a bank which gives 6% interest compounded half-yearly. How 
much would he get back after 2 years? 
$ Ravi deposited 50,000 rupees in a bank, which gives 6% interest, compounded quarterly. How much 
would he get back after 9 months? 
$ Lathika deposited 25,000 rupees in a bank which gives 8% interest compounded half-yearly. Najma 
deposited the same amount at the same rate of interest, but compounded quarterly. What is the 
difference in the amounts the Same trick 
A company which manufactures computers increases its production by 10% every year. In 2008, the 
company produced 75,000 computers. How many computers would it produce in 2010? 
Here, the number of computers produced every year is 10% more than the number produced the year 
before. So, starting with 75,000, we have to find the number of computers produced every year after 
that for two years. 
Try to find out. 
It is the same computation as that of calculating the total amount on compounding interest, isn’t it? 
would get back after one year 
The population of Kerala increases by 2% every year. The current population is 3 crores. What would be 
the population after 3 years? 
$ A TV manufacturer reduces the price of a particular model by 5% every year. The current price of 
this model is 8000 rupees. What would be the price after 3 years?

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Anila digital textbook

  • 1. 1.MONEY MATH Appu’s father was attracted by it and bought a TV from them. But Babu’s father decided to take out a loan from the local co-operative bank for buying a TV. They wanted details of the price.He made enquiries and found that the price of the advertised TV was 9000 rupees. He took out a loan from a bank for this amount at 12% interest and bought the TV How much money should Raju’s father pay in one year? Babu’s father paid off the bank loan in one year. How much money did he pay the bank? Who spent more? CONCESSION AND PENALTY Joseph and Thomas took out an agricultural loan of 20,000 rupees each from a bank at 10% rate of interest. The bank allows 4% concession on the interest, if the loan is paid back in two years. If the amount is not paid back within this period, they charge an additional 1% penal interest. Joseph paid all dues on the exact day of completing two years. But Thomas could do it only the next day. How much did each pay back? Let’s first compute how much Joseph paid: Amount of loan = Rs. 20,000 Rate of interest = 10% Concession = 4% Actual rate of interest = 6% Interest = Rs. 2400 What about Thomas? Amount of loan = Rs. 20,000 Rate of interest = 10% Since he couldn’t pay back in time, he doesn’t get the concession on interest rate; and he has to pay penal interest as well. So, what is the rate of interest for him? Actual rate of interest = 11% Interest = Rs. 4400
  • 2. Total amount paid = 20000 + 4400 = Rs. 24400 See how much more he had to pay, just for one day’s delay! BANKS AND FINANCE COMPANIES Jayan and Binny each took out a loan of 15,000 rupees; Jayan from a private finance company which charges 5 rupees per month for 100 rupees as interest and Binny from a nationalized bank charging 12% compound interest. How much should each pay back after two years?What is the annual rate of interest in the case of the financial company? So, what is the total amount Jayan has to repay after two years? In the case of the bank, interest is compounded. Principal for the first year = Rs. 15000 Interest for the first year = . . . . . . . . . Principal for the second year = . . . . . . . . . Interest for the second year = . . . . . . . . . Amount to be repaid = . . . . . . . . . What is the difference in the amounts Jayan and Binny has to repay? A COMPUTATIONAL TRICK Let’s see how we can compute the total amount including interest, using algebra. We denote the principal (amount invested or loan taken out) by p, the rate of compound interest by r% and compute the total amount including interest to be paid back after n years. (see the lesson, Money for Money! in the Class 7 textbook.) Principal for the first year = p Interest for the first year = p *r/100 Continuing like this, the total amount A, including interest after n years is given by A= 푷 ∗ (ퟏ + 푹 ퟏퟎퟎ )풏 What if it is simple interest, instead of compound interest?
  • 3. A= 푷 ∗ (ퟏ + 풓풏 ퟏퟎퟎ ) Usha deposited 8000 rupees in a bank, which gives compound interest at 7%. How much would she get back after 3 years? Let’s compute using our formula: here the principal is 3000 rupees, rate of interest is 7% and the number of years is 3. Total amount including interest 1073 1000 =8* Let’s find out $ Mahadevan took out a loan of 5,000 rupees from abank, which charges compound interest. The rate of interest was 10% for the first year, but it was increased to 12% during the second year. How much money should Mahadevan pay at the end of two years to settle the debt? $ Compute the compound interest for 25,000 rupees at 9%, for 2 years. $ Verghese borrowed 16,000 rupees from a bank at 8% compound interest. After 2 years, the interest rate was lowered to 6%. What is the total amount that Verghese has to repay at the end of 3 years? CHANGING TIMES Ravi took out an agricultural loan of 12,500 rupees from the co-operative bank. They charge 8% interest. How much should Ravi pay back after 6 months? Amount of loan = Rs. 12,500 Rate of interest = 8% Period = 6 months Now can’t you do the following problems on your own? $ Rahim, Johny and Gopu deposited 10,000 rupees each, under different schemes, in a bank which gives
  • 4. 8% interest. Rahim gets simple interest, Johny gets interest compounded half-yearly and Gopu gets interest compounded quarterly. Compute the total amount each of them gets back after one year and compare these amounts. $ A person deposited 20,000 rupees in a bank which gives 6% interest compounded half-yearly. How much would he get back after 2 years? $ Ravi deposited 50,000 rupees in a bank, which gives 6% interest, compounded quarterly. How much would he get back after 9 months? $ Lathika deposited 25,000 rupees in a bank which gives 8% interest compounded half-yearly. Najma deposited the same amount at the same rate of interest, but compounded quarterly. What is the difference in the amounts the Same trick A company which manufactures computers increases its production by 10% every year. In 2008, the company produced 75,000 computers. How many computers would it produce in 2010? Here, the number of computers produced every year is 10% more than the number produced the year before. So, starting with 75,000, we have to find the number of computers produced every year after that for two years. Try to find out. It is the same computation as that of calculating the total amount on compounding interest, isn’t it? would get back after one year The population of Kerala increases by 2% every year. The current population is 3 crores. What would be the population after 3 years? $ A TV manufacturer reduces the price of a particular model by 5% every year. The current price of this model is 8000 rupees. What would be the price after 3 years?