Practice Problems on Interest Rate Formula
Q1. What is the ratio of interest generated while a certain sum of money is subjected to simple interest at the same rate for 3 and 5 years respectively.
Q2. What is the difference of interest amount generated when a sum of Rs. 1000 is subjected to 10% compound interest rate, compounded monthly and annually?
Q3. Calculate the compound interest on a sum of Rs. 5000 at a rate of 7% for 3 years if it is compounded monthly, quarterly, half-yearly and annually.
Q4. What is the ratio of interest amount generated when a sum of Rs. 8000 is compounded at 7% rate and 7% simple interest rate separately for 5 years?
Q5. Compound interest on Rs. 5000 for 3 years at 6% per annum is double the simple interest on some amount of money for 3 years at 8% per annum. What is the sum placed on simple interest is?
Interest Rate Formula
Interest Rate Formula is a mathematical formula used to find the percent rate which is charged on Principle to yield the final amount. Interest Rate is a fundamental concept that comes into play whenever money changes hands. Whether someone is borrowing, lending, or investing money, interest rates play a crucial role. Interest is of two types namely simple interest and compound interest. Interest Rates can be charged daily, monthly, weekly, quarterly, half-yearly, and yearly.
This article will explain the basics of interest rates, the difference between simple and compound interest, and provide the Interest Rate formulas for both types.
Table of Content
- What is Interest Rate?
- What is Interest Rate Formula?
- Simple Interest Rate
- Compound Interest Rate
- Simple Interest Rate vs Compound Interest Rate