Compound Interest Compounded Annually
Compound Interest Compounded Annually
Definition: Compound interest is calculated as a percentage as a total amount a the end of the previous compounding period.
Formula:
First Type: 
,
where 
= Future Value
= Present Value or Original Amount
= Annual Interest Rate as a Decimal
= multiplier
n = number of years of investment
Illustration: What will Rs 5000 invested at 8% p.a compound interest amount to after 2 years ?
Solution : An interest rate of 8% indicates that i = 0.08.
For 2 years , n = 2 and so = Rs 5000
= Rs 5832
Second Type:
To find interest only, we use
Compound interest = -
Illustration: How much interest is earned according to the above example1 .
Solution : interest earned = $ 5832 - $ 5000 = $ 832
now , To Find Compound Interest (CI) when Interest is Compounded Annually:
In such cases where interest is compounded yearly, the interest accrued during the first year is added to the principal and the amount so obtained becomes the principal for the second year. The amount at the end of the second year becomes the principal for the third year, and so on.
Illustration: Find the compound interest on Rs 25000 for 3 years at 6% per annum, compounded annually.
Solution: Principal for the first year = Rs. 25000.
Amount at the end of the first year = 25000 + 1500 = Rs 26500.
Principal for the second year = Rs. 26500.
Amount at the end of the second year = Rs 26500 + 1590 = Rs 28090.
Principal for the third year = Rs 28090.
Amount at the end of the third year = 28090 + 1685.40 = Rs 29775.40.
Therefore, compound interest = 29775.40 - 25000 = Rs 4775.40.
Compound Interest By Formula:
For the above example:
Principal = 25000
Rate= 6%
time= 3 years
Therefore, compound interest = 29775.40 - 25000 = Rs 4775.40.
A factory kept increasing its output by the same percentage every year.find the percentage,if it is known that the output doubled in the last two years: | |||
| Right Option : B | |||
| View Explanation | |||
The difference between simple interest and C.I. at the same rate for Rs.5000 for 2 years in Rs.72. The rate of interest is? | |||
| Right Option : D | |||
| View Explanation | |||
A sum of Rs. 50,000 is borrowed and the rate of interest is 10% per annum. What is the compound interest for 5 years? | |||
| Right Option : A | |||
| View Explanation | |||
Students / Parents Reviews [20]
Abhyas is good institution and a innovative institute also. It is a good platform of beginners.Due to Abhyas,he has got knoweledge about reasoning and confidence.My son has improved his vocabulary because of Abhyas.Teacher have very friendly atmosphere also.
Manish Kumar
10thAbhyas Methodology is very good. It is based on according to student and each child manages accordingly to its properly. Methodology has improved the abilities of students to shine them in future.
Manish Kumar
10thBeing a parent, I saw my daughter improvement in her studies by seeing a good result in all day to day compititive exam TMO, NSO, IEO etc and as well as studies. I have got a fruitful result from my daughter.
Prisha Gupta
8thWe started with lot of hope that Abhyas will help in better understnding of complex topics of highers classes. we are not disappointed with the progress our child has made after attending Abhyas. Though need to mention that we expected a lot more. On a scale of 1-10, we would give may be 7.
Manya
8thMy experience with Abhyas is very good. I have learnt many things here like vedic maths and reasoning also. Teachers here first take our doubts and then there are assignments to verify our weak points.
Shivam Rana
7thAbhyas academy is great place to learn. I have learnt a lot here they have finished my fear of not answering.It has created a habit of self studying in me.The teachers here are very supportive and helpful. Earlier my maths and science was good but now it has been much better than before.
Barkha Arora
10thWhen I have not joined Abhyas Academy, my skills of solving maths problems were not clear. But, after joining it, my skills have been developed and my concepts of science and SST are very well. I also came to know about other subjects such as vedic maths and reasoning.
Sharandeep Singh
7thAbhyas is an institute of high repute. Yogansh has taken admission last year. It creates abilities in child to prepare for competitive exams. Students are motivated by living prizes on basis of performance in Abhyas exams. He is satisfied with institute.
Yogansh Nyasi
7thIt was good as the experience because as we had come here we had been improved in a such envirnment created here.Extra is taught which is beneficial for future.
Eshan Arora
8thMy experience with Abhyas academy is very good. I did not think that my every subject coming here will be so strong. The main thing is that the online tests had made me learn here more things.
Hiya Gupta
8thMy experience with Abhyas academy is very nice or it can be said wonderful. I have been studying here from seven class. I have been completing my journey of three years. I am tinking that I should join Abhyas Academy in tenth class as I am seeing much improvement in Maths and English
Hridey Preet
9thAbhyas institute is one of the best coaching institute in the vicinity of Ambala cantt.The institute provides good and quality education to the students.The teachers are well experienced and are very helpful in solving the problems. The major advantages of the institute is extra classes for weak...
Shreya Shrivastava
8thOne of the best institutes to develope a child interest in studies.Provides SST and English knowledge also unlike other institutes. Teachers are co operative and friendly online tests andPPT develope practical knowledge also.
Aman Kumar Shrivastava
10thMy experience was very good with Abhyas academy. I am studying here from 6th class and I am satisfied by its results in my life. I improved a lot here ahead of school syllabus.
Ayan Ghosh
8thThe experience was nice. I studied here for three years and saw a tremendous change in myself. I started liking subjects like English and SST which earlier I ran from. Extra knowledge gave me confidence to overcome competitive exams. One of the best institutes for secondary education.
Aman Kumar Shrivastava
10thMy experience with Abhyas Academy has been very good. When I was not in Abhyas whenever teacher ask questions I could not speak it confidently but when I came in Abhyas, my speaking skills developed and now I am the first one to give the answer of teachers question.
Upmanyu Sharma
7thIn terms of methodology I want to say that institute provides expert guidence and results oriented monitering supplements by requsite study material along with regular tests which help the students to improve their education skills.The techniques of providing education helps the students to asses...
Aman Kumar Shrivastava
10thIt was a good experience with Abhyas Academy. I even faced problems in starting but slowly and steadily overcomed. Especially reasoning classes helped me a lot.
Cheshta
10thUsually we see institutes offering objective based learning which usually causes a lag behind in subjective examinations which is the pattern followed by schools. I think it is really a work of planning to make us students grab the advantages of modes of examination, Objective Subjective and Onli...
Anika Saxena
8thA marvelous experience with Abhyas. I am glad to share that my ward has achieved more than enough at the Ambala ABHYAS centre. Years have passed on and more and more he has gained. May the centre flourish and develop day by day by the grace of God.
