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Simple interest & compound interest vedio

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Simple interest & compound interest vedio

  1. 1. Simple interest & compound interest By Bharath kumar vemaluri Assoc.prof for aptitude Kavali.
  2. 2. Simple interest: The money paid by the borrower to the lender for the use of money lent is called ‘INTEREST’. The sum lent is called ‘PRINCIPLE’ Simple interest S.I. = (PxNxR)/100 P = Principle N = Number of years R = Rate % p.a, Amount = Principal + S.I
  3. 3. Examples:  Find the simple interest on Rs. 11,000 for 5 years at 8% p.a. ? Sol: S.I. = (11000X5X8)/100 =4400  Satish borrowed Rs. 5,000 from a bank at 18% p.a. find the amount to be paid by him after 2 years 6 months ? Sol: S.I = 5000 x 5/2 X18/100 =2250 Amount = P + S.I. = 5,000 + 2,250 = Rs. 7,250
  4. 4. Mr. Govind lent Rs. 1800 to Mr. Khan for 3 years and Rs. 3300 to Mr. Mukund for 2 years and he received Rs. 480 as simple interest in all. What is the rate of interest per annum? Sol: S.I. obtained by Mr. Govind = (1800X3XR)/100 + (3300X2XR)/100 = 54 R + 66 R = 120 R = Rs. 480 R = 4% p.a. A certain sum of money is invested by Mr. Gopal at 7% p.a. after 4 years. However he would get Rs. 520 more simple interest, if he invest the same sum a t6% p.a. for 9 years. What is the sum? Sol: The difference between S.I. obtained in two cases is Rs.520 ( PX9X6)/100 – (PX4X7)/100= 520 54P-28P=52000 26P=52000 p=52000/26 = 2000
  5. 5.  In how many years will a sum of money become five times at 20% p.a. simple interest? Sol: Here Amount = 5P…………….(A=P+4P=5P) S.I. = 4P 4P = (PXNX20)/100 => N = 20 years
  6. 6. Note:  in S.I the interest remains constant or is same for every year.  in S.I the interest percentages over the year can be added.  in C.I the interest percentages over the years are to be multiplied individually.
  7. 7. Compound interest:  Calculate the C.I 0n 10000 at 20% per annum after 2 years. The interest being compounded annually? soln: p=10000 T=2 years R%=20% amount=10000X1.2X1.2=12400 C.I=12400-10000 = 2400
  8. 8. Calculate the C.I on 10000 at 10% per annum after 1.5 years the interest being compounded halfyearly? Soln: p= 10000 T=1.5 years (6 months+ 6 months+ 6 months) R%=10% ,so for six months 5% Amount= 10000X1.05x1.05X1.05=11576.25 C.I= amount-principle=11576.25-10000=1576.25.  Arun deposited 8000 in HDFC bank which pays him 12% per annum for 12 months . the interest being compounded quarterly . find the amount? Soln: principle=8000 Time =1 year (3m+3m+3m+3m) quarter= 3 months. rate= 12% ,so 3% for every quarter amount= 8000X1.03X1.03X1.03X1.03 =9004.07
  9. 9. The difference between C.I & S.I on a certain sum of money after 3 years,20% per annum is 2560. find the sum? soln: p= y T= 3 years R=20% Difference between c.i and s.i is 2560, 1.2X1.2X1.2X Y – 1.6 y=2560 1.728y-1.6y=2560 0.128y= 2560 y=20000/-(sum)
  10. 10.  A sum of money becomes 4 times in 10 years . in how many years will it become 64 times on C.I? soln: *4 *4 *4 X…………………..4X……………………16X…………………..64X 10 yrs 10 yrs 10 yrs so 30 years.

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