RD Sharma Solutions for Class 8 Maths - Compound Interest - Free PDF Download
FAQs on RD Sharma Class 8 Maths Solutions Chapter 14 - Compound Interest
1. What is Compound Interest?
Compound interest refers to the process in which the interest associated with a savings account, loan, or investment rises over time exponentially instead of linearly. It is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods. The rate at which compound interest accrues depends on the frequency of compounding, such that the higher the number of compounding periods, the greater the compound interest.
2. Why does one have to study RD Sharma solutions for Class 8 Maths chapter Compound Interest?
RD Sharma is a highly recommended book by toppers and experts to score better in the exam. Students are advised to practice all the questions given in the exercise for a better understanding. They can refer to previous year questions and other free PDFs available on Vedantu for comprehensive knowledge. Vedantu also has free material by RD Sharma and carefully made solutions to all of it. Students can access it from the website and its mobile application. They can also download it from the links below and study offline.
3. What is the formula to calculate compound interest?
The formula to calculate compound interest is CI = P[(1 + R)^nt – 1].
Here,
CI denotes compound interest
P = principal amount
R = rate of interest
n = number of compounding years
t = time (in years)
Compound interest is an interest paid on a loan or certain amount of money. It depends on both the principal and interest accumulated over a certain time. This is what differentiates it from simple interest. If the interest differs every year and gets increased if we stop paying every month then we can say the loan is charged with compound interest. It is used to calculate changes in population and computing growth of bacteria etc.,
4. What is the formula to calculate compound interest on a daily basis?
The formula to calculate compound interest is:
A = P(1 + r/365)^{365 * t}
A = amount
P = principal
t = time period
Compound interest is an interest charged on a certain sum of money. It can be calculated annually, quarterly and half - yearly. Compound interest is charged on the principal amount and the interest. This is the difference between simple and compound interest. Simple interest is calculated just on the principal amount. Generally banks offer loans for compound interest. If you look at the bank statement and find the interest rate changing every year and increasing then you can understand that you are being charged with compound interest.
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5. What is the Difference Between Simple Interest and Compound Interest?
Simple interest is based on a principal or initial amount. Compound interest shall be measured on the principal sum as well as on the accrued interest of the intervening periods and can therefore be known as interest on interest.