Interest
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- Words: 280
- Pages: 8
Project Prepared By
Promila Walia
(Math Mistress)
G.G.Sec.School Bhargo Camp Jalandhar
Types of Interest
1. 2.
Simple Interest Compounded Interest
Simple Interest
Simple Interest which is commonly referred to as S.I. means that calculation of annual installment paid on the sum of loan taken by a person for a specific period of time.
Calculation of S.I. S.I. = (P*R*T) / 100 Where: P – Principal Sum of Loan Taken R – Interest Rate at which Loan is Taken T – Time Period for which loan is Taken
Above Mentioned formula tells us the annual amount of interest to be paid by the customer. & after specific period of time he has to return total Amount which is cal. As: Amount = Principal + S.I.
Compound Interest
Compound Interest which is commonly referred to as C.I. means that calculation of annual Compounded installment paid on the sum of loan taken by a person for a specific period of time.
Calculation of C.I. C.I. = [ P*(1 + R)T – 1 ] Where: P – Principal Sum of Loan Taken R – Interest Rate at which Loan is Taken T – Time Period for which loan is Taken Above Mentioned formula tells us the annual amount of compounded interest to be paid by the customer. & after specific period of time he has to return total Amount which is cal. As: Amount = Principal + C.I.
Difference B/w S.I & C.I C.I.
S.I.
Principal Remains Constant through out loan period.
Principal Changes after every year with previous year Interest being added up in to Principal.
S.I amount is generally less.
C.I amount is generally more than the principal.
Promila Walia
(Math Mistress)
G.G.Sec.School Bhargo Camp Jalandhar
Types of Interest
1. 2.
Simple Interest Compounded Interest
Simple Interest
Simple Interest which is commonly referred to as S.I. means that calculation of annual installment paid on the sum of loan taken by a person for a specific period of time.
Calculation of S.I. S.I. = (P*R*T) / 100 Where: P – Principal Sum of Loan Taken R – Interest Rate at which Loan is Taken T – Time Period for which loan is Taken
Above Mentioned formula tells us the annual amount of interest to be paid by the customer. & after specific period of time he has to return total Amount which is cal. As: Amount = Principal + S.I.
Compound Interest
Compound Interest which is commonly referred to as C.I. means that calculation of annual Compounded installment paid on the sum of loan taken by a person for a specific period of time.
Calculation of C.I. C.I. = [ P*(1 + R)T – 1 ] Where: P – Principal Sum of Loan Taken R – Interest Rate at which Loan is Taken T – Time Period for which loan is Taken Above Mentioned formula tells us the annual amount of compounded interest to be paid by the customer. & after specific period of time he has to return total Amount which is cal. As: Amount = Principal + C.I.
Difference B/w S.I & C.I C.I.
S.I.
Principal Remains Constant through out loan period.
Principal Changes after every year with previous year Interest being added up in to Principal.
S.I amount is generally less.
C.I amount is generally more than the principal.
