The balance after 8 years in the savings account is Rs.16500 if the savings account earns 15% interest annually.
What is simple and compound interest?
Simple Interest can be defined as the sum paid back for using the borrowed money, over a fixed period of time.
Compound Interest can be defined as when the sum principal amount exceeds the due date for payment along with the rate of interest, for a period of time.
Formula. S.I. = (P × T × R) ⁄ 100.
Given that:
Initial deposit(P) = 7500
Rate of interest=15%
Time =8 years
By the use of simple interest,
We have Simple interest = (principal)(rate)(time)/100
Putting the value, we get
Simple interest=7500*15*8/100
By calculation we get
Simple interest = Rs.9000
So the total balance after 8 years in the savings account
= 9000+7500
=Rs.16500
Therefore, the balance after 8 years in the savings account is Rs.16500.
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