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MBA Entrance Quantitative Aptitude, Simple and Compound Interest, Module 3

hello friends welcome to this session, in this session let’s see what do we mean by multiplicity of principal, ok so do you realize that I am investing some money in simple interest at a principal of P and at a rate of interest as r, so after some years my interest amount will grow and it will become 2 times that of my principal amount or in other words my interests I is equal to 200% of my P what was the amount yes, amount is Principal plus interest so in this case amount will be P+I that is nothing but P+ twice that of p which is equal to 3 P so here my amount has become thrice of that of my principal that is what we mean by multiplicity of principal that my principal is becoming three times a year similarly if my interest grows on to be 300% of my principal amount then my amount will be 4 times P or A will be 4times my principal, let’s take it to general form so if my amount A = n x p then I = (n-1)x100% as you can see here if A is 3p then I is 200%, A is 4p then I is 300% let’s go ahead you remember this graph yes this is the simple interest and as you can see here amount changes linearly or the difference between any two consecutive years is the same now do you realise one more fact that interest is directly proportional to the number of years that means if in year 2 i am earning some interest then in year 4 the interest that I will earn will be proportionate that is interest is directly proportional to number of years, now let’s look at this, principle becomes n time in n years for example principal becomes 3 times in 7 years so what do you think interest will be yes interest will be n-1x 100% as we have seen in the earlier slide, now if I am earning interest of n – 1 x100 % in n years how much interest I will earn in one year.

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2017-04-18T04:57:59+00:00 Categories: MBA Entrance Exams||0 Comments
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