ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The compound interest is obtained by subtracting the principal amount from the compound amount. Hence, the formula to find just the compound interest is as follows: CI = P (1 + r/n)nt-P. In the above expression, P is the principal amount.

Detailed explanation-2: -The simple interest formula is A=P(1+r)t A = P ( 1 + r ) t where P represents the amount originally deposited, r is the interest rate, and A is the amount in the account at t years.

Detailed explanation-3: -Compound interest, can be calculated using the formula FV = P*(1+R/N)^(N*T), where FV is the future value of the loan or investment, P is the initial principal amount, R is the annual interest rate, N represents the number of times interest is compounded per year, and T represents time in years.

Detailed explanation-4: -Calculate Rate using Rate Percent = n[ ( (A/P)^(1/nt) )-1] * 100. In this example we start with a principal of 10, 000 with interest of 500 giving us an accrued amount of 10, 500 over 2 years compounded monthly (12 times per year). If you paste this correctly you should see the answer for Rate % = 2.44 in cell B1.

Detailed explanation-5: -Here’s the simple interest formula: Interest = P x R x T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).