SIMPLE INTEREST AND COMPOUND INTEREST
Principal: The amount of money deposited or borrowed is called Principal.
Interest: The amount earned or paid for the use of money is called interest
SIMPLE INTEREST: The interest that is earned only on the principal is called simple interst.
SI=(P*R*T)/100
where P=principal
R=rate of interest
T=time in year
Compound interest: The principal which is paid not ony pricipal but also on the interest is called compound interest.
Principal: The amount of money deposited or borrowed is called Principal.
Interest: The amount earned or paid for the use of money is called interest
SIMPLE INTEREST: The interest that is earned only on the principal is called simple interst.
SI=(P*R*T)/100
where P=principal
R=rate of interest
T=time in year
Compound interest: The principal which is paid not ony pricipal but also on the interest is called compound interest.
The amount at the end of n years is given by
A=P(1+r/100)n
P=Principal
r=rate of interest
I=A-P
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