P = Principle amount invested or borrowed
R = Rate of interest per term
N = Number of terms
Term = duration for which interest is calculated
A man invested Rs. 10000 at 4% per annum simple interest. What is the interest he will get at the end of 3 years?
P = 10000; N = 3; R = 4
Substitute the values in the above equation, we get
SI = 10000 x 3 x 4/100
What is the compound interest obtained for Rs. 16000 at 2% per annum for three years?
CI for three years = CI on first year + CI for second year + CI for third year
CI for first year = RP/100 = (3×16000)/100 = 480
CI for second year = (RP/100) + (3/100)480 = 494.4
CI for third year = (RP/100)+(3/100)(489.4+480) = 509.23
Total interest = 480 + 494.4 + 509.2