Question 2 - Figure it out - Page 22, 23, 24 - Chapter 1 Class 8 - Fractions in Disguise (Ganita Prakash II)

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Question 2 Bank of Wahapur offers an interest of 5% p.a. Compare how much one gets if one deposits ₹20,000 for a period of 4 years with compounding and without compounding annually.Here, we have to consider both examples Simple Interest Compound Interest Now, given that Principal = P = ₹ 20,000 Rate = R = 5% per year = 5/100 Time = 4 years Without Compounding Now, Interest = Principal × Rate × Time = P × R × T = 20,000 × 𝟓/𝟏𝟎𝟎 × 4 = ₹ 4,000 And, Amount = Principal + Interest = 20,000 + 4,000 = ₹ 24,000 With Compounding Now, Amount = 𝑨 =𝑷(𝟏+𝒓)^𝒕 = 20,000 × (1+5/100)^4 = 20,000 × ((100 + 5)/100)^4 = 𝟐𝟎,𝟎𝟎𝟎 × (𝟏𝟎𝟓/𝟏𝟎𝟎)^𝟒 = 𝟐𝟎,𝟎𝟎𝟎 ×𝟏𝟐𝟏𝟓𝟓𝟎𝟔𝟐𝟓/(𝟏𝟎,𝟎𝟎,𝟎𝟎,𝟎𝟎𝟎) = ₹24,310.13…