Tag Archive: simple interest

Formulae Usage On Simple And Compound Interest

Written on March 28, 2008 by Ai Ling in E-Maths
4 Comments

We have discussed about Simple And Compound Interest using 2 case studies previously based on concepts understanding. Now we have introduced formulaes which will make your calculation faster and easier :)

To find the Total Amount based on Simple Interest, this is the formuale you can use:
A_n=P(1+\frac{r}{100}n)

An : Total Amount after n years

P: Original Principal Amount

r: Simple Interest Rate

n: Number of Years

To find the Total Amount based on Compound Interest, this is the formuale you can use:
A_n=P(1+\frac{r}{100})^n<br>

An : Total Amount after n years

P: Original Principal Amount

r: Compound Interest Rate

n: Number of Years

Apply these formulaes to the case studies we have discussed, did you get the same answer?

Congrats!Now you have 2 different approaches, the formulae way or the conventional way to solve all Interest questions.

Keep using the strategies learnt so that you get better and better.

Related Posts:

4 Comments - Leave your comment!

Simple Interest And Compound Interest

Written on March 26, 2008 by Ai Ling in E-Maths
2 Comments

Given a choice between the 2 different types of interest, which will you choose? This is taught under Elementary Mathematics (E-Math)

Before you make the smart choice, let’s examine the differences between these 2 different types of interest through an example.

CASE OF SIMPLE INTEREST

alwaysLovely deposited $1000 into Bank A for 2 years which pays a simple interest of 10% p.a.( per annum –> per year). How much will she get at the end of 2 years?

1 year –>10% , 2 years –> 20%

Total interest earned for 2 years = 1000 * 20% = $200

Total amount = $1000 + $200 = $1200

CASE OF COMPOUND INTEREST

alwaysLovely deposited $1000 into Bank B for 2 years which pays a compound interest of 10% p.a. How much will she get at the end of 2 years?

Interest earned in Year 1 = 1000 * 10% = $100

Principal Amount for Year 2 = $1000 + $100 = $1100

Interest earned in Year 2 = 1100 * 10% = $110 /*Interest is calculated based on the new principal amount*/

Total amount received for 2 years = $1000 + $100 + $110 = $1210

So which is better, Bank A or Bank B ?

Check out the next post on Formulae Usage on Simple And Compound Interest which will reduce your time to reach your correct answer.

Related Posts:

2 Comments - Leave your comment!