Compound Interest

How to Solve Simple and Compound Interest Problems

Simple interest grows linearly on the original principal (SI = P×R×T/100), while compound interest grows on principal plus accumulated interest, giving CI = P×…

How to Solve Compound Interest with Half-Yearly Compounding

When interest compounds half-yearly, halve the annual rate and double the number of periods before applying the compound interest formula, so CI = P×(1+(R/2)/1…

How to Solve Difference Between CI and SI Problems

The difference between compound and simple interest arises purely from interest-on-interest, and for two years it reduces to a clean shortcut: CI − SI = P×(R/1…

How to Solve Problems on Installments (Loan Repayment)

Installment problems are solved by equating the loan’s present value to the sum of each future installment discounted back to today at compound interest, since…

How to Solve Compound Interest Compounded Quarterly

When interest compounds quarterly, the annual rate is divided by 4 and the number of compounding periods is multiplied by 4, giving CI = P×(1 + R/(4×100))^(4T)…

How to Solve Sinking Fund Problems

A sinking fund is a series of equal periodic deposits, each earning compound interest, that accumulates to a target future amount, so the required deposit is f…

How to Solve Compound Interest Installment Repayment Problems

A compound-interest installment problem is solved by discounting each future installment back to present value using (1+R/100) raised to the number of years un…

How to Solve Present Worth Problems

Present worth is the sum of money that, if invested today at the given compound rate, would exactly grow to a stated future amount due after a fixed time, comp…

How to Solve Basic Annuity Problems

An annuity is a series of equal periodic payments, and its present worth is the sum of the present values of every individual payment, discounted back at the g…