Example 1 · level 1
Arjun deposits ₹47,000 in a bank in Surat at 8% per annum simple interest. What is the interest after 5 years?
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- SI = 47,000 × 8 × 5 ÷ 100 = ₹18,800.
Answer: ₹18,800
CLASS 8 MATHS · COMPARING QUANTITIES
Simple and compound interest
SI = P × R × T ÷ 100. Compound amount A = P(1 + R/100)ⁿ, and CI = A − P.
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Worked examples
Example 2 · level 2
Diya invests ₹29,000 at 20% per annum, compounded annually, for 2 years. Find the compound interest.
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- Year 1: interest on ₹29,000 at 20% = ₹5,800, amount ₹34,800.
- Year 2: interest on ₹34,800 at 20% = ₹6,960, amount ₹41,760.
- Amount A = ₹41,760.
- CI = A − P = ₹41,760 − ₹29,000 = ₹12,760.
Answer: ₹12,760
Example 3 · level 3
Arjun invests ₹32,000 at 10% per annum, compounded annually, for 3 years. Find the compound interest.
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- Year 1: interest on ₹32,000 at 10% = ₹3,200, amount ₹35,200.
- Year 2: interest on ₹35,200 at 10% = ₹3,520, amount ₹38,720.
- Year 3: interest on ₹38,720 at 10% = ₹3,872, amount ₹42,592.
- Amount A = ₹42,592.
- CI = A − P = ₹42,592 − ₹32,000 = ₹10,592.
Answer: ₹10,592