Mathematics is a subject with a wide variety of applications. It is used extensively to solve many problems. This is what makes this subject intriguing. It requires a logical approach. With rigorous practice and constant revision of formulas, it is possible to master this tough subject. Many students excel in this subject due to their hard work and practice. Mathematics is applied in many different streams and is a crucial component in all fields. One of the basic uses of Mathematics is interest computation. The first chapter which we deal with comprises simple interest. This is also one of the most asked topics in all examinations. This is the reason why attention should be paid to this topic. To gain expertise in problems related to interest computation, it is very necessary to memorize all the formulas. Without having a clear understanding of the formulas, it is not possible to solve complex problems. This is the reason why students give in extra effort to memorize all the formulas. After memorizing the formulas, students should solve as many problems as possible. This helps them in enhancing their thought process.
By solving numerous problems, students understand the approach required to solve any problem. After rigorous practice, students can solve any problem related to this topic just by looking at it. Another important aspect of this chapter is to read the question properly. One has to read the question and collect the data given without any mistake. In many instances, students make mistakes in copying the data given in the question and end up getting the wrong answer. Thus, the entire practice goes in vain. This is the reason why students should be very careful while dealing with problems related to this topic. One of the most important topics of this chapter is simple interest. This is the basic component of interest computation.
Simple interest is defined as the interest computed on the principal portion of the contribution to a savings account. Simple interest states that the borrower has to pay interest only on the principal and not on the interest generated. This is the unique part of simple interest.
Simple interest is calculated by obtaining the product of the principal, the rate, and the time. However, loans do not use this form of calculation. This is because the interest generated in this form is very low. It is calculated in extremely rare circumstances. This is the reason why students ignore this essential topic. However, this topic is frequently asked in many critical examinations. One needs to practice all problems associated with this topic to master it. The fundamentals are extremely important because without proper knowledge of the formulas one is likely to get tricked by the tough questions.
There is another very popular method of calculating interest. This method is used more frequently as compared to the former method. This is the reason why more focus is given on this topic. Even students practice this method more as compared to the other method. This type of interest computation is known as compound interest formula. In this type of method, the principal gets modified along with the interest. The interest adds to the principal. Thus, the interest generated is much more as compared to the previous method. This form of interest is utilized extensively in economics and finance departments.
The compound interest is computed by using its standard formula. The new amount becomes equivalent to the original sum assured multiplied by the rate raised to the power of the number of years. This formula is very important if one wishes to solve all problems related to compound interest. They must practice numerous illustrations to get a strong grip on this topic. It is of many different types. Compound interest can be calculated weekly, monthly, and even half-yearly. One should practice questions of different types to clear all doubts related to questions.
Compound interest has a wider range of applications as compared to simple interest. This is the reason why stress is given on this topic in higher classes. Therefore, it is better to work on the fundamentals and build a strong base.
Students can seek assistance from Cuemath, a leading online platform that clears doubts related to Maths and coding. This article will surely play a vital role in explaining the basics of interest computation to the readers.
Talha Ali is your tech generalist, covering a wide spectrum of topics within the ever-evolving world of technology. With a curiosity for the latest innovations, industry trends, and breakthroughs. Whether it’s hardware, software, emerging technologies, or the intersection of tech with daily life, Talha’s articles provide readers with a well-rounded perspective on the dynamic landscape of the tech industry.