The document discusses simple and compound interest calculations, illustrated with examples involving a farmer borrowing money and an individual investing in a bank. It provides formulas for calculating simple interest (S.I.) and compound interest (C.I.), with specific scenarios detailing how returns are calculated over time. Key questions and calculations are included to reinforce understanding of the differences between simple and compound interest.

1. SIMPLE AND COMPOUND
INTEREST
CLASS:VIII

2. OBSERVE

3.  WHICH PLACE IS THIS?
 HAVE YOU ALL VISITED THIS
PLACE?
 WHY DO YOU GO TO A BANK?
 WHY DO YOU BORROW MONEY
FROM A BANK?
Answer the following questions

4. Farmer
Ramesh
Landlord
Kashi naath

5. • Poor farmer Ramesh has no money to
purchase seeds.
• He borrows money from Landlord
KASHI NATH Rs 1000.
• Ramesh promise him to return after 3
years.
• Landlord gives Rs 1000 at 10% p.a at
the end of 3 yrs has to pay Rs 1331
• WHY?

6. Teacher asks the question?
1.What is amount of interest?
2.What is the amount of interest
called as?

7. HE has to pay 1000X3X10
100
10x3x10
=300
Therefore
Hay has to pay 1000+300
=1300
But he has to pay more than
1300
He has to pay 1331
WHY?
COMPOUND INTEREST

8. Simple Interest = PxNxR
100

9. Q) Ayesha invested Rs 3000 in Axis bank for 2 yrs
at the rate of 10% p . a .How much she will return
after 2 yrs.
P=Rs3000 , R=10% , N=2yrs
S.I for 1st year = PxNxR
100
= 3000x10x1
100
S.I for 1st year= 300 Rs

10. Amount=principal+interest
Amount=3000+300=3300
At the end of 1st year=3300
Amount at end of 1st year is Principal for 2nd year
S .I for 2nd year=PxNxR
100
=3300X10X1
100
=330
Amount=Principal+Interest
=3300+330
=3630 Rs
At the end of period of 2 years Ayesha gets Rs 3630.

11. Formula to calculate Compound interest
A=P(1+R )N
100
Compound Interest = A - P
=3630-3000
=630

12. Sachin borrowed Rs 2000 for 2yrs at the rate 5% pa. what
amount will she return at the end of 2 years?
P=2000 R = 5% N=2yrs
A=P(1+R )N
100
=2000 (1+5)2
100
=2205
C.I=A-P
=2205-2000
=205Rs

13. 1)State the formula for S.I.
2)In which type of interest the principal
amount changes?
3)State the formula for C.I.