COMPOUND INTERESTE. PARKAVI

16-EDM-22B.Ed I YEAR

MATHEMATICAL EDUCATION

INTRODUCTION

• How many of you have been to bank with your parents?

• What have you observed in bank?• What is the main purpose of bank?

INTRODUCTION

• Saving money i.e. depositing rupees.

INTRODUCTION

•Cash withdraw•Payment purposes like bill, loans etc.,

Topic introduction

• Why we need to deposit money in bank?• We could also keep it in our home.• What is the reason behind depositing money in

bank?

INTRODUCTION

INTRODUCTION

Simple interest:When interest is paid only on the principle aloneIs known as simple interest.

Simple Interest

Compound Interest

• The interest which is paid on the principle as well as on the accrued interest is called as compound interest.

Explanation

• Consider vinay has borrowed Rs.50,000 from bank with 4% rate of interest for two years.

• Vinay has to pay Rs.2000 as interest in the first year.

• If he couldn’t pay it then the interest will be added to the principle i.e. sum = principle + interest

• Sum = Rs.50000+ Rs.2000 = Rs.52000.

Explanation

• Now vinay has to pay interest in the second year with Rs.52000 as new principle.

• This way of calculating interest is known as compound interest.

COMPOUND INTEREST

Formula For Compound Interest

Calculation Of Compound Interest In Different Ways

COMPOUND INTERESET

COMPOUNDED QUARTERLY

COMPOUNDED HALF YEARLY

COMPOUNDED ANNUALLY

When compounded quarterly

When compounded half-yearly

When compounded annually

A problem in compound interest

Real life applications

These are some features which gives profit• Provident fund• Bank depositsNegative features• Credit card bills• Loans

Conclusion

•Thank you