Answered: "What does10 percent per annum mean?"

High School
Algebra
Pre-Algebra
Ratios, rates, proportions

jordancuzwb

Answered question

2023-02-06

What does

10

percent per annum mean?

Answer & Explanation

Mia Small

Beginner2023-02-07Added 11 answers

Rate of Interest:
The amount that will be paid or received yearly until the end of the maturity period is the rate of interest per annum.The amount to be paid or received depends on whether the interest is simple or compound.If it is simple interest,

S I = \frac{P R T}{100}

, where

P

is the principal amount,

R

is the rate of interest, and

T

is the time period.If the rate of interest is

10 %

p.a,

S I = \frac{P \times 10 \times 1}{100}

i.e.,

0.1 P

The simple interest to be paid or received annually is

10 %

of the principal amount in addition to the principal amount.If the interest is compounded, the total amount to be paid or received is

A = P (^{1 + \frac{R}{100}) T}

If the rate of interest is

10 %

p.a,

A = P {(1 + \frac{10}{100})}^{1}

i.e.,

1.1 P

.Hence the rate of interest on a deposit or loan per year is written as

10

percent per annum.

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