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Concept:
Compound Interest: Sometimes it so happens that the borrower and
the lender agree to fix up a certain unit of time ,say yearly or half-yearly
or quarterly to settle the previous account.
In such cases ,the amount after the first unit of time becomes the principal
for the 2nd unit ,the amount after second unit becomes the principal for the
3rd unit and so on.
After a specified period ,the difference between the amount and the money
borrowed is called Compound Interest for that period.
Formulae:
2.Find C.I on Rs.16000 at 20% per annum for 9 months compounded quaterly
Sol:
MethodI:
R=20%
12months------------------------20%
=> 3 months------------------------5%
For 9 months,there are '3' 3months
--------16000+800
--------16000+800+40
--------16000+800+40+10+2
=>Rs.2522
MethodII:
Amount=P[1+(R/100)]n
=16000[1+(5/100)]3
=Rs.18522
C.I=18522-16000
=Rs.2522
Medium Problems
1.The difference between C.I and S.I. on a certain sum at 10% per annum
for 2 yrs is Rs.631.find the sum
Sol:
MethodI:
NOTE:
a) For 2 yrs -------->sum=(1002D/R2)
b) For 3 yrs -------->sum=(1003D/R2(300+R))
Sum=1002*631/102
=Rs.63100
MethodII:
Let the sum be Rs.X,Then
C.I.=X[1+(10/100)]2-X
S.I=(X*10*2)/100
=X/5
C.I-S.I.=21X/100-X/5
=X/100
X/100=631
X=Rs.63100
2.If C.I on a certain sum for 2 yrs at 12% per annum is Rs.1590.
What would be S.I?
sol:
C.I.=Amount-Principle
Let P be X
C.I=X[1+(12/100)]2-X
=>784X/625-X=1590
=>X=Rs.6250
S.I=(6250*12*2)/100=Rs.1500
4.A sum of money doubles itself at C.I in 15yrs.In how many yrs will it
become 8 times?
sol:
Compound Interest for 15yrs p[1+(R/100)]15
p[1+(R/100)]15=2P
=>p[1+(R/100)]n=8P
=>[1+(R/100)]n=8
=>[1+(R/100)]n=23
=>[1+(R/100)]n=[1+(R/100)]15*3
since [1+(R/100)] =2
n=45yrs
6.The difference between C.I and S.I on a sum of money for 2 yrs at
121/2% per annum is Rs.150.the sum is
sol:
Sum=1002D/R2=( 1002*150) /(25/2)2=Rs.9600
7.If the S.I on sum of money at 15% per annum for 3yrs is Rs.1200,
the C.I on the same sum for the same period at same rate is---------
sol:
S.I=1200
P*T*R/100=1200
P*3*5/100=1200
=>P=Rs.8000
C.I for Rs.8000 at 5% for 3 yrs is-------------8000+400
-------------8000+400+20
-------------8000+400+20+20+1
C.I =400+400+20+400+20+20+1
=Rs.1261
Complex Problems
3.A man borrowed Rs.800 at 10 % per annum S.I and immediately lent
the whole sum at 10% per annum C.I What does he gain at the end of 2yrs?
sol:
C.I.=Rs.[800[1+(10/100)2]-800]=Rs.168
S.I=Rs.[800*10*2/100]=Rs.160
Gain=C.I-S.I=Rs(168-160)
=Rs.8
4.On what sum of money will be S.I for 3 yrs at 8% per annum be half
of C.I on Rs.400 for 2 yrs at 10% per annum?
sol:
C.I on Rs.400 for 2yrs at 10%=Rs.[400*[1+(10/100)]2-400]
=Rs.84
Required S.I =1/2*84=42/-
New S.I=Rs.42,Time=3yrs Rate=8%
Sum=Rs.[100*42/(3*8)]
=Rs.175
5.A sum of money placed at C.I doubles itself in 5yrs .It will amount to
8 times itself in-------------
sol:
p[1+(R/100)]5=2P
=>[1+(R/100)]5=2
To become 8 times =>8P
p[1+(R/100)]5=2^3P
=[1+(R/100)]^(5*3)
=[1+(R/100)]^15
n=15years