1)A bank account, for an account with $1000 initial principal and 20% interest per year would have

I = P x r x t

I = 1000 x 0.2 x 1

I = $200

A = P + I

I = P x r x t

I = 1200 x 0.2 x 1

I = 240

A = P + I

Here we have counted interest on interest, but this is a bit longer method. So we will use a formula to calculate directly the amount say after 3 yrs., 4 yrs. and so on.

A = P ( 1 + r )
^{t} |

Where P = Principal

r = rate in percent

t = time period in years.

1) Find the compound-interest in $8000 for 2 years at 6% p.a.

A = P ( 1 + r )^{t}A = 8000 ( 1 + 0.06) ^{2}A = 8000 (1.06) ^{2}A = 8000 x 1.1236 A = $8988.8I = A - P I = 8988.8- 8000 I = $988.80 |

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2) Find the compound interest on $24,000 at 15% p.a for 2

P = $24,000, R = 15% and Time = t = 2

When time is in fraction then amount is given by the following formula.

= 24000( 1 + 0.15)

= 24000 x (1.15)

= 24000 x 1.3225 x 1.05

Amount = $ 33,327

∴ C.I = Amount - P

= 33,327 - 24,000

C.I = $ 9,327.

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• Find Compound- Interest when interest is compounded Half yearly

• Find Compound- Interest when interest is compounded Quarterly

• Find CI when interest is compounded annually but Rates are different

• Finding Principal

• Finding Time Period of Investment

• Finding Rate of Interest

8th grade math

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