Compound Interest

Important Facts and Formulae: 


Compound Interest: 
Sometimes it so happens that the borrower and the lender 
gree 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