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Activity Discussion Math Math problem about interest.

  • Math problem about interest.

    Posted by Priya on June 5, 2023 at 7:33 pm

    What is simple interest and compound interest? Discuss with their formulas.

    Hina replied 1 year, 1 month ago 2 Members · 1 Reply
  • 1 Reply
  • Hina

    Member
    June 5, 2023 at 7:53 pm
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    Q. What is Simple Interest?

    Ans. Simple interest is a percentage of money added to the debt of a borrower whenever he takes a loan. Since simple interest rates are compounded annually they are highly preferred by the borrowers. It is calculated on the principal amount on a yearly basis. The formula for simple interest is:

    Simple Interest = ( PxRxT) / 100 ,

    where is P= Principal Amount borrowed, R= Rate of interest, T= Period of time

    Q. What is Compound Interest?

    Ans. Compound interest is a percentage of money added to the debt of a borrower at any time. Since it is compounded at any time, it is highly preferred by the investors and is considered a financial burden for the borrowers due to high returns. It is calculated on the principal amount at a certain time along with the simple interest compounded for the previous year. The formula for compound interest is :

    Compound Internet = P(1+R/100)^n ,

    P= Principal Amount, R= Rate of interest, n = time period

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