Compound interest calculations: Class 8 practice
With compound interest, each year's interest is added to the principal, so next year's interest is calculated on a larger amount: A = P(1 + R/100)ⁿ.. Read the method, follow the three worked examples, then try the six questions.
What you should know first
- Simple interest
- Powers
The idea behind compound interest calculations
With compound interest, each year's interest is added to the principal, so next year's interest is calculated on a larger amount: A = P(1 + R/100)ⁿ.
Step-by-step method
- Write P, R, n.
- A = P(1 + R/100)ⁿ.
- CI = A − P.
- Compare with SI to see the extra earned.
Worked example 1 (Basic)
Find the amount and compound interest on ₹10000 at 20% per year for 2 years, compounded annually.
- A = 10000 × (1 + 20/100)^2 = 10000 × 1.440
- A = ₹14400
- CI = 14400 − 10000 = ₹4400
- Answer: A = ₹14400, CI = ₹4400
Worked example 2 (Standard)
Find the amount and compound interest on ₹5000 at 10% per year for 2 years, compounded annually.
- A = 5000 × (1 + 10/100)^2 = 5000 × 1.210
- A = ₹6050
- CI = 6050 − 5000 = ₹1050
- Answer: A = ₹6050, CI = ₹1050
Worked example 3 (Challenge)
Find the amount and compound interest on ₹5000 at 20% per year for 3 years, compounded annually.
- A = 5000 × (1 + 20/100)^3 = 5000 × 1.728
- A = ₹8640
- CI = 8640 − 5000 = ₹3640
- Answer: A = ₹8640, CI = ₹3640
Common mistakes and misconceptions
- Using SI formula
- Forgetting to subtract P to get CI
Practice questions
- (Basic) Find the amount and compound interest on ₹15000 at 20% per year for 2 years, compounded annually.
- (Basic) Find the amount and compound interest on ₹11000 at 10% per year for 2 years, compounded annually.
- (Standard) Find the amount and compound interest on ₹16000 at 10% per year for 2 years, compounded annually.
- (Standard) Find the amount and compound interest on ₹3000 at 20% per year for 2 years, compounded annually.
- (Challenge) Find the amount and compound interest on ₹6000 at 10% per year for 3 years, compounded annually.
- (Challenge) Find the amount and compound interest on ₹21000 at 20% per year for 3 years, compounded annually.
Answer key with full working
- Q1: A = 15000 × (1 + 20/100)^2 = 15000 × 1.440 → A = ₹21600 → CI = 21600 − 15000 = ₹6600 → Answer: A = ₹21600, CI = ₹6600
- Q2: A = 11000 × (1 + 10/100)^2 = 11000 × 1.210 → A = ₹13310 → CI = 13310 − 11000 = ₹2310 → Answer: A = ₹13310, CI = ₹2310
- Q3: A = 16000 × (1 + 10/100)^2 = 16000 × 1.210 → A = ₹19360 → CI = 19360 − 16000 = ₹3360 → Answer: A = ₹19360, CI = ₹3360
- Q4: A = 3000 × (1 + 20/100)^2 = 3000 × 1.440 → A = ₹4320 → CI = 4320 − 3000 = ₹1320 → Answer: A = ₹4320, CI = ₹1320
- Q5: A = 6000 × (1 + 10/100)^3 = 6000 × 1.331 → A = ₹7986 → CI = 7986 − 6000 = ₹1986 → Answer: A = ₹7986, CI = ₹1986
- Q6: A = 21000 × (1 + 20/100)^3 = 21000 × 1.728 → A = ₹36288 → CI = 36288 − 21000 = ₹15288 → Answer: A = ₹36288, CI = ₹15288
Syllabus note
This skill is listed under "Comparing Quantities" for Class 8 in the NCERT/CBSE books. ICSE, IGCSE, IB and state boards may teach it in a different chapter or year.
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.
Related practice and notes
Frequently asked questions
Which chapter is compound interest calculations in?
"Comparing Quantities", Class 8 Maths (NCERT/CBSE). Other boards may place it differently.
How were the answers checked?
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.