Question

3% of a 70000 what will be the interest in 20 years find the simple interest​

Answer 1

Answer:

The formulas of simple and compound interests are known as interest formulas. When it comes to the Simple Interest (SI), it is applied when an amount is borrowed or invested. It depends on the entire duration of the loan. It does not take any factors into account like past interest. It should be noted that it is generally in short term loans where the simple interest is generally applied.

It is typically expressed as a percentage as the simple interest rate is a ratio. Regarding the compound interest, it is that type of interest where the calculation is made on the interest and principal which is accumulated over the previous tenure. This is the reason why Compound Interest is also termed as “interest on interest”.

It becomes possible for you to find the interest amount by using a formula provided the principal amount, rate of interest and time period are given.

So, the Simple Interest = SI = ( P x R x T ) / 100

Here, SI = Simple Interest

P = Principal

R = Rate of Interest (in percentage).

T = time duration (in years)

The following formula is used in order to calculate the total amount

Amount (A) = Principal (P) + Interest (I)

Now look at the table below to get the right idea on the interest formulas of Simple Interest and Compound Interest

SI Formula

S.I. = Principal × Rate × Time

CI Formula

C.I. = Principal (1 + Rate)Time − Principal

You can have a look at one example where we will use interest formulas:

A sum of Rs 4000 is borrowed and the rate is 7%. How can you find the simple and compound interest for 2 years?

Here, we know that

Simple Interest = Principle × Rate × Time = PTR/100

So, Simple Interest = 4000 × (7 ⁄ 100) × 2

i.e. Simple Interest = 560

Therefore the Simple Interest for 2 years is Rs. 560

Now, we need to calculate the Compound Interest

We, know that Compound Interest = Principal × (1 + Rate)Time − Principal

So, Compound Interest = 4000 × (1 + 7 ⁄ 100)2 – 4000

We get, Compound Interest = (4000 × 1.1449) – 4000

So, Compound Interest = 580

Therefore the compound interest for 2 years is Rs. 580.