Hi friends, today we will learn an interesting topic of algebra and an automatic way to solve its problem. You all must have learnt simple interest in previous class. It is money that is calculated on the principal amount that means that money you borrowed or gave to somebody for a definite time period. While the compound interest is defined as the interest is calculate when interest is added to principal amount. In this, interest is added and interest itself earns money. To calculate simple interest we have a formula:

SI = P *R * t / 100, Where, P is principal, R is rate of interest per annum, T is time

Let’s takes an example of SI, to see how to calculate SI. We have P= Rs800, t = 2 years and R = 4%pa SI= 800 * 2 * 4/100, SI = Rs 64 Principal So, simple interest on a principal 800 is Rs 64…

Similarly a formula is given to calculate the compound interest. The formula is given as: A = P(1 + R/ 100)n, Where, A is amount, P is principal, R is rate and, N is time. Makingcentsaddup

Let’s take an example to see how to calculate the out the values in formula and how to calculate the CI, P = 2500, n = 1 years R= 5% and interest is calculated yearly. Put values in formula we get, A = 2500 (1 + 5/100)1 A = 2500 (106/100) A= 25 * 106, A = 2650. In this way we calculate the compound interest.

You can also use compound interest calculator to solve compound interest questions, it is available online free of cost. Whenever you want to solve any compound interest sum you can use compound interest calculator. Using this calculator is simple. Just type the problem and it will show you the answer when you click on submit button. Using this calculator you can easily solve multiple problems and even all types of problems either they are simple or complex.