Compound Interest Calculation

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Pascal's Triangle for computing Compound Interest (CI) The traditional formula for computing CI is CI = P*(1+R/100)^N - P Using Pascal's

Triangle,

Number of Years (N) ------------------1___________1 2_________ 1 2 1 3 ________ 1 3 3 1 4 ________1 4 6 4 1 Eg: P = 1000, R=10 %, and N=3 years. What is CI & Amount? Step 1: Amount after 3 years = 1 * 1000 + 3 * 100 + 3 * 10 + 1 * 1 = Rs.1331 The coefficients - 1,3,3,1 are lifted from the Pascal's triangle above. Step 2: CI after 3 years = 3*100 + 3*10 + 3*1 = Rs.331 (leaving out first term in step 1) If N =2, we would have had, Amt = 1 * 1000 + 2 * 100 + 1 * 10 = Rs.1210 CI = 2 * 100 + 1* 10 = Rs.210

This is just an example u can try for more no. of yrs or different values including negatives if % growth is given for yrs(over the previous) lets say 2001 _ 2002 _ 2003 _ 2004 1 _____ 2 ____ 3 _____ 4 overall % growth in 2004 over 2000 would be 10.355024 solution:- multiplication of 4 no.s together considering base as 100 ( no.s should be nearby 100) 101 = 100 + a 102 = 100 + b 103 = 100 + c 104 = 100 + d ____

---110------35-------50------24 100+S(a)---S(ab)--S(abc)---S(abcd) S = sigma , S(ab) = Sum of pdt of no.s taken two at a time!!!!! this case is valid of any no. of products or any number u can take in place of a b c d negatives included.... so if numbers are small just like 1 2 3 4 here then u can neglact the no,s 50 and 24 as they will not be needed and directly can say that growth is 10.35% ********Care to be taken all the S should be placed there in 2 digit form so if no. of digit is less (example - 2*3 = 06) add 0 to it and make it 2 digit no. and if S is of 3 digit then take a carry to next no. example 110 105 103 _______ 118 95 150 so answer would be 1189650 or simply 18.97 growth!!!!

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