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Simple and Compound Interest


When someone lends money to other He tries to take interest over the money landed. Generally, he takes the simple or compounded interest Terms related: principle: Amount amount one lends
Interest: Extra money one asks when he lends money
Rate: Rate at which lender charge interest
time= Duration for which the lender lends money to someone
Simple Interest: Let 's take that one person lends 100 rs to someone at a simple interest rate of 5 yearly.Then he will receive 5 rs as interest at end of 1st year. 10 rs at the end of 2nd year, 15 rs as interest at the end of 3rd year.
Let's take someone lends 100rs for 3 years at a simple interest of 5% then He will receive 100+5*3=115
Let 's say a person lends money x at the simple interest rate of d% then He will receive. d rs every 100 rs every year.
Simple Interest: (principle*rate*time(year))/100
Total amount = principle+ Simple interest
Compound Interest: Let 's take that one person lends 100 rs to someone at a simple interest rate of 5 yearly: Then at the end of 1st year he will receive interest as 5 rs, at the end of the second year he will receive (105*5)/100 as interest amount. The formula for Amount one received will be
Total Amount=principle+interest
Direct formula to calculate Total amount is
Total Amount=Principle*(1+(rate/100))^time(in years)

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