Q1
What is the compound interest formula?
AA = P(1+R/100)^n
BA = P + R + n
CA = P × R × n
DA = P ÷ R ÷ n
ICSEClass 9 (ICSE)MathematicsCh 3 · Topic 1
Compound Interest (Using Formula)
The compound interest formula, A = P(1+R/100)^n, quickly calculates the final amount without calculating interest year by year manually.
Core concept
In the formula A = P(1+R/100)^n, A is the final amount, P is the principal, R is the rate, and n is the number of years.
How it works
For example, ₹1000 at 10% for 2 years: A = 1000(1+10/100)² = 1000(1.1)² = 1000×1.21 = ₹1210.
Why it matters
Compound interest can also be calculated for different time periods, like half-yearly or quarterly, adjusting the rate and time accordingly.
Key detail
Using this formula saves time for longer periods, compared to calculating interest manually year by year.
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Quick notes
• Formula: A = P(1+R/100)^n.
• A=amount, P=principal, R=rate, n=years.
• ₹1000 at 10% for 2 years: A=₹1210.
• This matches the year-by-year calculation.
• Compound interest can be half-yearly or quarterly.
• This adjusts rate and time accordingly.
• The formula saves time for longer periods.
• It's more efficient than manual calculation.