Question

1. What is the formula for compound interest?

Answer 1

Answer:

  1.   CI = P (1 + $\frac{r}{100}$ )^ n - P

        CI = A - P

      Where P is Principal

      R is interest rate

      n is number of years

   2. a. Semi annually - four times in a year

       b. Monthly           -  two times in a year

       c.  annually          -  once in a year

Step-by-step explanation:

1.  Money is said to be lent at compound interest , when the interest has become due at certain fixed period say, one year, half year, etc.., is given not paid to money lender, but is added to sum lent . The amount thus obtained become principal for next month and this process repeat until last period .

i.e CI = Final period - Initial period

or CI = A - P

or CI = P(1+ $\frac{r}{100}$) ^n - P

2. (a) Semi annually

        A = P (1 + $\frac{r}{4 * 100}$ )^ n × 4

   (b)  Monthly

       A = P (1 + $\frac{r}{2 * 100}$ ) ^ n × 2

   

   (c)  Annually

       A = P (1 + $\frac{r}{100}$ ) ^ n