## RD Sharma Class 8 Solutions Chapter 14 - Compound Interest (Ex 14.2) Exercise 14.2 - Free PDF

## FAQs on RD Sharma Class 8 Solutions Chapter 14 - Compound Interest (Ex 14.2) Exercise 14.2

**1.What is compound interest?**

As soon as the principal (amount on which interest is calculated) is renewed every year, compound interest is calculated in the same way as an annual simple interest calculation. You earn interest every year on the fixed amount that you keep in a bank. Each year you earn a higher interest rate. We need to calculate the compound interest separately for each year to find the compound interest for Rs 1000 over 2 years at 10%.

**2.What is the formula for Compound Interest?**

**Compound Interest Formula:**

Interest | Principle×Rate100 Principle×Rate100 |

Principal | Interest×100RateInterest×100Rate |

Rate | Interest×100Principal |

**3. When it comes to compound interest, what does the term Time mean?**

The loan duration, commonly expressed in years, determines how long the principal will be lent.

A loaned sum of money is called a principal. Interest is the profit earned from that principal.

**Compound interest-** This is the interest earned annually from lending a principal over a certain period of time.

**4. What does the term Principal and Amount mean in Compound Interest?**

In principle, an amount of money is lent for an agreed period of time at an agreed rate of interest.

The amount left at the end of the experiment is called the amount. In this case, the principal, as well as the interest earned, are included in the amount.

**5. Can compound interest be applied to a variety of situations?**

In the banking and finance sectors as well as in other fields, compound interest is used most often.

**It can be used in the following situations:**

Increasing or decreasing population.

A rise in bacteria.

Value increases or decreases.