Question

Compound interest worksheet

Answer 1

Assume a business man banks an amount of principle P, for n years at a compound interest of r%. His accumulated amount after n years will be given by formula:

[tex]accumulated=P(1+r/100)^n[tex]

P is the principle

r is the interest

n is the period

Note that compound interest borrows a hint from the geometric progression series.

for 5 years, at rate of 10% with principle of 5000;

Accumulated = 5000(1 + 10%)^5

Accumulated = 5000(1 + 0.1)^5

Accumulated = 5000 × 1.61

Accumulated = 8052.55 /=

Answer 2

Assume a business man banks an amount of principle P, for n years at a compound interest of r%. His accumulated amount after n years will be given by formula:

`{ \boxed{ \rm{accumulated =P(1 + (r)/(100) ) {}^(n) }}}`

• P is the principle
• r is the interest
• n is the period

Note that compound interest borrows a hint from the geometric progression series.

• for 5 years, at rate of 10% with principle of 5000;

Accumulated = 5000(1 + 10%)^5

Accumulated = 5000(1 + 0.1)^5

Accumulated = 5000 × 1.61

Accumulated = 8052.55 /=