Simple and Compound Interest - iisjubail.org

CLASS: VIII MATHEMATICS [Part 11] JULY 2020

L#8 COMPARING QUANTITIES

Simple and Compound Interest

Simple Interest (SI): Simple interest is the extra money charged on a loan where the principal amount will be fixed for a particular time period. Interest is the extra money that a bank gives for saving or depositing money with them. Similarly, when anybody borrows money, they pay interest.

Simple interest =�� �� �

���, where

P is the principal amount T is the number of years. R is the interest rate

Compound Interest (CI): Compound interest is the interest, calculated on the principal and the interest for the previous period. The principal amount increases with every time period, as the interest payable is added to the principal.

Where, P is the principal amount, R is the rate of interest and n is the number of years.

When compound interest is compounded half yearly, the interest rate will be half of the annual interest rate and the time period will be doubled.

Where, P is the principal amount, R is the rate of interest and n is the number of years.

Application of Formula of CI

Applications of compound interest are:

1. To calculate the growth rate of population (increase or decrease). 2. To calculate change in the price of an item (increase or decrease).

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الجبیل - المدرسة العالمیة الھندیة المملكة العربیة السعودیة –المنطقة الشرقیة

INTERNATIONAL INDIAN SCHOOL, AL-JUBAIL

Eastern Province – Kingdom of Saudi Arabia

Ex.8.3

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2. Kamala borrowed Rs 26,400 from a Bank to buy a scooter at a rate of 15% p.a. compounded

yearly. What amount will she pay at the end of 2 years and 4 months to clear the loan? (Hint:

Find A for 2 years with interest is compounded yearly and then find SI on the 2nd year amount

for �

�� years).

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8. Find the amount and the compound interest on Rs 10,000 for 1�

� years at 10% per annum,

compounded half yearly. Would this interest be more than the interest he would get if it was

compounded annually?

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12. A scooter was bought at Rs 42,000. Its value depreciated at the rate of 8% per annum. Find

its value after one year.

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Links relevant for learning L#8 Comparing Quantities

L#8 comparing Quantities (Ex 8.1, Ex 8.2, & Ex 8.3 solutions)

https://www.youtube.com/watch?v=Tqqz1-LSRE0&list=PL7YjFGahOhJVqzfdriCmisroZGX8flUmw

Simple Interest & Compound Interest: Concept

https://www.youtube.com/watch?v=vIPhIi9KzAQ

https://www.youtube.com/watch?v=dDWKXv3CYx8

https://www.youtube.com/watch?v=_3LjAO-aPVU

https://www.youtube.com/watch?v=p8lOfPCgAEA

Prepared By:

Mrs.Dhanya.M

Secondary Boys’ Section

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