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CONCEPT


Compound Interest:Sometimes it so happens that the borrower and
the lender agree to fix up a certain unit of time ,say yearly or half-yearly
or quarterly to settle the previous account.
In such cases ,the amount after the first unit of time becomes the principal
for the 2nd unit ,the amount after second unit becomes the principal for the
3rd unit and so on.
After a specified period ,the difference between the amount and the money
borrowed is called Compound Interest for that period.

Formulae:


Let principal=p,Rate=R% per annum Time=nyears

1.When interest is compounded Annually,
Amount=P[1+(R/100)]n
2.When interest is compounded Halfyearly,
Amount=P[1+((R/2)100)]2n
3.When interest is compounded Quaterly,
Amount=P[1+((R/4)100)]4n
4.When interest is compounded Annually,but time in fractions say 3 2/5 yrs
Amount=P[1+(R/100)]3[1+((2R/5)/100)]
5.When rates are different for different years R1%,R2%,R3% for 1st ,2nd ,
3rd yrs respectively
Amount=P[1+(R1/100)][1+(R2/100)][1+(R3/100)]
6.Present Worth of Rs.X due n years hence is given by
Present Worth=X/[1+(R/100)]n
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