## What is an example of simple and compound interest?

For example, if you borrowed $100 from a friend and agree to repay it with 5% interest, then the amount of interest you would pay would just be 5% of 100: $100(0.05) = $5. The total amount you would repay would be $105, the original principal plus the interest.

## How do you know if a problem is simple or compound interest?

Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”

**What will be the compound interest on rupees 20000 at the rate of 5% per annum for 2 years?**

Compound Interest C.I. = Amount – Principal = 28,800 – 20,000 = Rs. 8,800.

**What is compound interest with example?**

For example, if you deposit $1,000 in an account that pays 1 percent annual interest, you’d earn $10 in interest after a year. Thanks to compound interest, in Year Two you’d earn 1 percent on $1,010 — the principal plus the interest, or $10.10 in interest payouts for the year.

### How do we calculate compound interest?

Compound interest is calculated by multiplying the initial loan amount, or principal, by the one plus the annual interest rate raised to the number of compound periods minus one. This will leave you with the total sum of the loan including compound interest.

### How do I calculate simple interest?

Simple Interest Formulas and Calculations:

- Calculate Interest, solve for I. I = Prt.
- Calculate Principal Amount, solve for P. P = I / rt.
- Calculate rate of interest in decimal, solve for r. r = I / Pt.
- Calculate rate of interest in percent. R = r * 100.
- Calculate time, solve for t. t = I / Pr.

**What is the formula for calculating simple and compound interest?**

The formulas for both the compound and simple interest are given below….Interest Formulas for SI and CI.

Formulas for Interests (Simple and Compound) | |
---|---|

CI Formula | C.I. = Principal (1 + Rate)Time − Principal |

**What will be the simple interest on Rs 12000 at 10% pa for 3 years?**

Now Compound interest = A – P ⇒ Compound interest = Rs. 15972 – Rs. 12000 = Rs. 3972.

## What is the simple interest on the amount of Rs 8000 for 4 years at 12% pa?

Simple Interest = ₹3840.

## What is the maturity amount if Rs 20000 is deposited at 5% compound interest per annum for2 years?

Solution : Maturity value (in Rs.) `=20,000(1+(8)/(100))^(2)` `20,000(1.08)^(2)=23,328. ` Step by step solution by experts to help you in doubt clearance & scoring excellent marks in exams.