Scribd
Upload
5 views

Maths Presentation Ishvari

The document provides a comprehensive overview of interest and annuity calculations, including simple and compound interest formulas, examples, and various conditions for calculating principal, amount, rate of interest, and differences between simple and compound interest. It also covers annuity calculations, equated monthly installments (EMI), and two types of EMI calculations: interest on reducing balance and flat interest rate. The document concludes with examples demonstrating these financial concepts.

Uploaded by

tushar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
5 views

Maths Presentation Ishvari

The document provides a comprehensive overview of interest and annuity calculations, including simple and compound interest formulas, examples, and various conditions for calculating principal, amount, rate of interest, and differences between simple and compound interest. It also covers annuity calculations, equated monthly installments (EMI), and two types of EMI calculations: interest on reducing balance and flat interest rate. The document concludes with examples demonstrating these financial concepts.

Uploaded by

tushar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 29

O M E

EL C
W
GROUP NAME

ARYABHATA
GROUP LEADER – CHECHARE ISHVARI RAHUL

GROUP MEMBERS
1. SURANA KHUSHI KAMLESH
2. SHELKE GAYTRI BABASAHEB
3. KALASKAR SAKSHI SATISH
4. KAMBLE BHAGYASHRI RAJU
5. LAHAMGE POOJA GAJANAN
INTEREST AND
ANNUITY
INTEREST
When a person borrow some
money from other person or
institution . The borrower has
pay some charge to money
lender for use of money this
charge called interest.
SIMPLE INTEREST
• FORMULA – PNR/100
• EXAMPLE
What is simple interest on Rs 10000 @ 10 % p.a for 5 years.
ANS – P = 10000 N = 5 R = 10 %
We have ,
S.I = PNR/100
S.I = 10000*5*10/100
S.I = 500000/100
S.I = 5000
COMPOUND INTEREST
When interest is added to the
principal at the end of each
period and the total sum
obtained treated as principal for
the next period is called
compound interest .
CONDITION – 1
TO FIND OUT PRINCIPAL
FORMULA – A = P [1+ R/100]^n

EXAMPLE
What sum will amounted to Rs. 2000 in 3 years @6 %
p.a compound interest
ANS – A = 2000 R = 6 % N = 3
We have ,
A = P [ 1 + R/100 ] ^ n
2000 = P [1+ 6/100]^3
2000 = P [106/ 100]^3
2000 = P [1.06]^3
2000 = P [1.19]
P = 2000/1.19
P = 1680
CONDITION – 2
TO FIND OUT AMOUNT
FORMULA - A = P [ 1+ R/100 ]^n
EXAMPLE
Find the amount at the end of 5 years of sum o
Rs.2000 @ 6% p.a payable half yearly.
ANS – P = 2000 R= 6% = 6/2 = 3 N = 5*2
= 10
We have ,
A = 2000 [ 1 + 3/100 ]^10
A = 2000 [ 103/100 ]^10
A = 2000 [ 1.03 ]^10
A = 2000 [ 1.30 ]
A = 2600
CONDITION -3
TO FIND OUT PERIOD
FORMULA – A = P [ 1+ R/100 ]^n

example
Sum of Rs.4800 amounted to Rs.6240 in certain
period @ 12% p.a.
Find period.
ANS – P = 4800 A = 6240 R = 12%
We have ,
6240 = 4800 [ 1 + 12/100 ]^n
6240/4800 = [ 1+ 12/100 ]^n
1.3 = [ 1+ 12/100 ]^n
1.3 – 1 = 12n/100
0.3 = 12n/100
n = 0.3*100/12
n = 30/12
n = 2.5 years
CONDITION – 4
TO FIND OUT RATE OF INTEREST
FORMULA – A= P [ 1+ R/10 ]^n

EXAMPLE
Sum of money doubles itself in 6 years find out
rate of interest.
ANS - A = 2P N = 6 P = P
We have ,
A = P [ 1 + R/100 ]^n
2P = P [ 1+ R/100 ]^6
2P/P = [ 1+ R/100 ]^6
2 = [ 1+ R/100 ]^6
2 – 1 = [ R/100 ]^6
1 = 6R/100
R = 100*1/6
R = 16.6 %
CONDITION – 5
• TO FIND OUT COMPOUND INTEREST
FORMULA – C.I = A – P
EXAMPLE
Find compound interest on Rs. 10000 for 4 years @ 5% p.a
ANS - P = 10000 N = 4 R = 5%
We have ,
C.I = A – P
First we have to find A ,
A = P [ 1+ R/100 ]^n
A = 10000 [ 1+ 5/100 ]^4
A = 10000 [ 105/100 ]^4
A = 10000 [ 1.05 ]^4
A = 10000 [ 1.2155 ]
A = 12155
NOW ,
C.I = A – P
C.I = 12155 – 10000
C.I = 2155
CONDITION – 6
• COMPLEX PROBLEM
FORMULA – C.I – S.I
EXAMPLE
Find the difference between the simple interest
and compound interest on Rs.5000 for 3 years @
5% p.a compounded half yearly
ANS – P= 5000 N = 3 R = 5%
First we have to find S.I ,
S.I = PNR/100
S.I = 5000*3*5/100
S.I = 75000/100
S.I = 750
Now we have to find C.I ,
C.I = A – P
A = P [ 1 + R/100 ]^n
A = 5000 [ 1 + 2.5/100 ]^3
A = 5000 [ 102.5/100 ]^3
A = 5000 [ 1.025 ]^3
A = 5000 [ 1.1596 ]
A = 5798
C.I = 5798 – 5000
C.I = 798
Difference ,
= C.I – S.I
= 798 – 750
= 48
AMOUNT OF ANNUITY
• FORMULA – A = x/i [ {1 + i }^n - 1]
EXAMPLE
Find the amount of immediate annuity of Rs. 1500 per year payable
for 12 years @ 10% p.a
ANS - x = 1500 N = 12 R = 10 [ i = r/100 = 10/100 = 0.1]
A = x/i [ {1+ i }^n - 1 ]
A = 1500/0.1 [ { 1+0.1 }^12 -1 ]
A = 15000 [ { 1.1 }^12 -1 ]
A = 15000 [ 3.1384 - 1 ]
A = 15000 [ 2.1384 ]
A = 32076
PRESENT VALUE OF ANNUITY

• FORMULA – P = x/i [ 1- { 1+ i }^-n ]


EXAMPLE
Find the present value of annuity of Rs.500
payable at the end of every half year for 10
years @10% p.a compound interest
ANS – x = 500 N = 10 = 10 *2 = 20 R =
10% = 10/2 =5 [ i = r/100 = 5/100 = 0.05 ]
P = x/i [ 1- {1+ i }^-n ]
P = 500/0.05 [ 1- {1+ 0.05 }^-20 ]
P = 10000 [ 1- { 1.05 }^-20 ]
P = 10000 [ 1- 0.3768 ]
P = 10000 [ 0.6232 ]
P = 6232
EQUATED MONTHLY
INSTALLMENT
More people purchasing
vehicle and home by taking
loans from the bank the
repayment is generally made
in monthly installment over
the period one year/ two
THERE ARE TWO TYPES OF
EMI FOR CALCULATION
A] INTEREST ON REDUCING BALANCE
FORMULA – P = x/i [ 1 – { 1 + i }^-n ]

EXAMPLE
What is EMI of loan Rs. 25000 is repaid in 4 years @12%
p.a on outstanding amount at beginning of each year .
[ 1.01]^-48 = 0.6202
ANS - P = 25000 N = 4*12 = 48 R = 12%
[ i = r/1200 =
12/1200 = 0.01 ]
P = x/i [ 1- { 1+ i }^-n ]
25000 = x/0.01 [ 1- { 1+ 0.01}^-48 ]
25000*0.01 = x [ 1 – { 1.01 }^-48 ]
250 = x [ 1 – 0.6202 ]
250 = x [ 0.3798 ]
x = 250/0.3798
x = 658
• B] FLAT INTEREST RATE
FORMULA – Firstly calculate ,
A = P [ 1+ RN/100 ]
Then we find ,
EMI = A/K
K = Number of months
EXAMPLE
Mr . A borrowed Rs. 800000 from company @ 10% p.a flat interest
for period 8 year . Find EMI
ANS – P = 800000 N = 8*12 = 96 R = 10%
Firstly calculate ,
A = P [ 1 + RN/100 ]
A = 800000 [ 1 + 10*8/100 ]
A = 800000 [ 1 + 80/100 ]
A = 800000 [ 180/100 ]
A = 800000 [ 1.8 ]
A = 14,40,000
Now ,
EMI = A/K
EMI = 14,40,000/96
EMI = 15000
THANK YOU

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy