There is simple interest and there is compound interest but this question is the first that I have heard of a simple compound interest.
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Simple Interest = p * i * n p is principle and i is interest rate per period and n is the number of periods. A = P(1 + r)n is for compound interest.
Simple interest (compounded once) Initial amount(1+interest rate) Compound Interest Initial amount(1+interest rate/number of times compounding)^number of times compounding per yr
Simple interest is calculated one time @ a specified rate over a specific length of time. Compound interest is calculated multiple times @ a specified rated divided by the number of given periods within a specified time. example: $100 @ 10% interest over 1 year. Simple interest: principle x rate x time = interest; $100 x .10 x 1 = $10 example: $100 @ 10% interest compounded quarterly over 1 year. Compound interest: principle x {(1 + rate / #periods)n} = interest $100 x {(1 + .10 / 4 )^4} = $100 x (1 .025 )^4 = $100 x 1.1038 = $10.38
At what rate of simple interest will the interest on Rs.925 be two-fifth of it in 8 years?
To calculate an interest (as money), multiply the capital, times the interest rate (divided by 100, if it is expressed in percent), times the number of periods. The above assumes simple interest; compound interest is a bit more complicated.