JSS3 First Term Mathematics Lesson Note – Compound Interest

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WEEK 3

TOPIC: COMPOUND INTEREST

CONTENTS:

• Profit and loss (revision)
• Simple interest (revision)
• Compound interest
• Word problems.

PROFIT AND LOSS (REVISION)

When any transaction is done, we either make profit or a loss. When an article is sold at a price greater than the price it was bought, then a profit is made. On the other hand, if an article is sold at a price less than the cost, we have made a loss.

Hence,

Profit = selling price – cost price

Loss = Cost price – selling price

In commercial transactions, profit and loss are usually expressed as a percentage of the cost price.

That is,

profit percent = ^profit/_{cost price} X 100%

loss percent = ^loss/_{cost price} X 100%

Examples:

1. A trader bought a book for N75 and sold it for N What is the profit percent?

Solution

Cost price =  N75

Selling price = N86

Profit = selling price – cost price

= N86- N75 = N11

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