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Concepts: Simple Interest Video Lecture | CSAT Preparation - UPSC

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FAQs on Concepts: Simple Interest Video Lecture - CSAT Preparation - UPSC

1. What is simple interest?
Ans. Simple interest is a basic type of interest that is calculated on the principal amount of a loan or investment. It is a fixed percentage of the principal and does not take into account any compounding.
2. How is simple interest calculated?
Ans. Simple interest is calculated using the formula: Interest = (Principal) x (Rate) x (Time). The principal refers to the initial amount of money, the rate is the interest rate per period, and the time is the duration for which the interest is calculated.
3. Can you provide an example of calculating simple interest?
Ans. Sure! Let's say you have a principal amount of $1000, an interest rate of 5%, and a time period of 2 years. The simple interest would be calculated as: Interest = (1000) x (0.05) x (2) = $100. So, the simple interest on this loan would be $100.
4. What is the difference between simple interest and compound interest?
Ans. The main difference between simple interest and compound interest is that simple interest is calculated only on the principal amount, while compound interest takes into account both the principal and the accumulated interest. Compound interest can result in higher overall interest payments over time.
5. Can simple interest be negative?
Ans. No, simple interest cannot be negative. Simple interest is always a positive value, representing the additional amount of money earned or paid on a principal amount.
207 videos|156 docs|192 tests

Timeline

00:21 Formula for Simple Interest
00:41 Difference between Simple and Compound Interest
01:11 Example 1
02:29 Example 2
02:29 Question 1
04:04 Example 3
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