Question

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How to find compound interest by adding interest?

Answer 1

C.I =P(1+R/100-1)
Simple formula
firstly find Amount and then subtract it from Principle amount
A=P(1+R/100)
C.I=A-P

Answer 2

Compounded interest can be found by repetitive adding the simple interest.

For example, if the principal amount is Rs 1000 and it is compounded for 3 years at 10% interest rate.

We start off by finding the interest for the first year:

Principal = Rs 1000

Interest = 10% of Rs 1000 = Rs 100

So, now the amount in the bank is Rs 1000 + Rs 100 = Rs 1100

We calculate the second year interest based on the principal amount of Rs 1100.

Principal = Rs 1100

Interest = 10% of Rs 1100 = Rs 110

So now, the amount in the bank is Rs 1100 + Rs 110 = Rs 1210

We calculate the third year interest based on the principal amount of Rs 1210.

Principal = Rs 1210

Interest = 10% of Rs 1210 = Rs 121

So now, the amount in the bank is Rs 1210 + Rs 121 = Rs 1331

So the amount at the end of 3 years is Rs 1331.