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Math Project Simple and Compound Interest

The document outlines two projects focused on Simple Interest and Compound Interest in banking. It explains the purpose, formulas, and provides multiple examples for calculating interest, amount, rate, and principal. The content emphasizes the importance of these concepts in financial planning and investment growth.

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borkatte.prabhakar.pai
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193 views5 pages

Math Project Simple and Compound Interest

The document outlines two projects focused on Simple Interest and Compound Interest in banking. It explains the purpose, formulas, and provides multiple examples for calculating interest, amount, rate, and principal. The content emphasizes the importance of these concepts in financial planning and investment growth.

Uploaded by

borkatte.prabhakar.pai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Mathematics Project

Project I: Simple Interest

Purpose of Simple Interest in Banking:


 Simple Interest helps banks and customers calculate interest on loans and deposits
over a fixed time.
 It is easy to calculate and understand, especially for short-term financial dealings.
 Used in savings accounts, fixed deposits, and short-term loans.
 Helps estimate how much a customer owes or earns without reinvestment.
 Promotes saving and provides predictable growth on investments.

Problems Based on Simple Interest:


Formula: SI = (P × R × T) / 100

1. Example 1:

P = 10,000, R = 5%, T = 2 years

SI = (10000×5×2)/100 = 1,000

2. Example 2:

P = 8,000, R = 4%, T = 3 years

SI = (8000×4×3)/100 = 960

3. Example 3:

P = 15,000, R = 6%, T = 4 years

SI = (15000×6×4)/100 = 3,600

4. Example 4:

P = 5,000, R = 10%, T = 2 years

SI = (5000×10×2)/100 = 1,000

5. Example 5:

P = 12,000, R = 7%, T = 3 years

SI = (12000×7×3)/100 = 2,520
Project II: Compound Interest

Purpose of Compound Interest in Banking:


 Encourages savings as the interest earned is reinvested.
 Helps banks grow investments and offer better returns.
 Used in loans to calculate total repayment over time.
 Essential for investment planning and financial stability.
 Gives more accurate results over time than simple interest.

Type 1: Finding Compound Interest and Amount


Formula: A = P(1 + r/100)^t, CI = A - P

6. Example 1:

P = 10,000, r = 5%, t = 2 years

A = 11,025, CI = 1,025

7. Example 2:

P = 8,000, r = 4%, t = 3 years

A = 8,999, CI = 999

8. Example 3:

P = 15,000, r = 6%, t = 4 years

A = 18,937, CI = 3,937

9. Example 4:

P = 5,000, r = 10%, t = 2 years

A = 6,050, CI = 1,050

10. Example 5:

P = 12,000, r = 7%, t = 3 years

A = 14,701, CI = 2,701

Type 2: Finding Rate of Interest (r)


Formula: A = P(1 + r/100)^t, solve for r
11. Example 1:

P = 5,000, A = 6,050, t = 2 years

r = 10%

12. Example 2:

P = 12,000, A = 15,552, t = 3 years

r = 9%

13. Example 3:

P = 20,000, A = 26,910, t = 4 years

r ≈ 7.8%

14. Example 4:

P = 7,000, A = 8,679.23, t = 3 years

r = 7.4%

15. Example 5:

P = 25,000, A = 31,104, t = 2 years

r = 11.5%

Type 3: Finding the Principal (P)


Formula: P = A / (1 + r/100)^t

16. Example 1:

A = 6,050, r = 10%, t = 2 years

P = 5,000

17. Example 2:

A = 15,552, r = 9%, t = 3 years

P = 12,000

18. Example 3:

A = 26,910, r = 8%, t = 4 years


P ≈ 20,000

19. Example 4:

A = 10,000, r = 5%, t = 3 years

P = 8,638

20. Example 5:

A = 50,000, r = 6%, t = 2 years

P = 44,490

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