Saving Class 9 NCERT Solutions for ‘Introduction to Financial Markets’ is important because it allows students to quickly revise key concepts, practice accurate answers, and prepare effectively for exams.
Why Save Class 9 NCERT Solutions
I. Choose the correct answer.
Q. Mr. Raja has invested Rs. 7,000 in a bank that offers him 7% compound (yearly) rate of interest. What would be his expected return after 3 years?
a) Rs. 8470
b) Rs. 8575
c) Rs. 7490
Q. As per “Rule of 72” how many years will your money take to double if compounded at the rate of 6%?
a) 8 years
b) 10 years
c) 12 years
Q. The amount of money that an investor will need to reach his investment goal is based on which of the following?
a) Principal amount only
b) Interest only
c) Principal amount and interest
Q. Compounding is
a) interest on principal and interest earned already
b) principal amount and interest on principal
c) Principal amount only
II. Fill in the blanks.
Q. Savings can be termed as __ income minus consumption spending.
Show Answer ⟶Q. Generally there are two types of interest which we can earn namely _ and _.
Q. An amount of Rs. 1,00,000 which compounds at the rate of 10% per year will become __ after 2 years.
Show Answer ⟶Q. As per Rule of 72, when a yearly compounded investment of Rs. 500 becomes Rs. 1000 in 6 years, the rate of return is _ %.
Show Answer ⟶III. Match the following.
- Rule of 72 – Doubling period
- Simple interest – Interest on principal only
- Compound interest – Interest on principal & interest earned already
- Pay yourself first – Savings before spending
- Disposable income – Savings after consumptions
IV. True or false.
Q. Paying yourself first” means saving after spending.
Show Answer ⟶Q. The amount of interest earnings depend on the interest rate, the amount of money borrowed (principal) and not the length of time that the money is deposited.
Show Answer ⟶Q. In simple interest calculation, interest is calculated on the interest accrued during the term of deposit.
Show Answer ⟶Q. Compound interest will give more earnings for the depositors than the simple interest.
Show Answer ⟶Q. The Rule of 72 tells you how fast you can double your money.
Show Answer ⟶V. Answer the following briefly
Q. How will you calculate simple interest?
Answer: The money is borrowed, and interest is charged for the use of that money for a certain period of time. The money you saved and put in the bank is used for some period of time by the bank and then returned to you with interest. The formula for simple interest is:
- Simple Interest (SI) = (P × R × T) ÷ 100
Q. How will you calculate compound interest?
Answer: Compound interest is paid on the original principal and on the accumulated past interest. In our previous example we calculated the simple interest on a sum of Rs. 100, which worked out to Rs. 10 each year. This is because the interest was being calculated on the original principal amount, or Rs. 100 only.
- Compound Interest Formula:
- A = P(1 + r/n)^(nt)
Where:
- A = Final amount (Principal + Interest)
- P = Principal amount (initial investment)
- r = Annual interest rate (in decimal)
- n = Number of times interest is compounded per year
- t = Time in years
To find Compound Interest (CI):
- CI = A – P
VI. Answer in detail
Q. What are the different types of interests calculated for the investments?
Answer: The money you have saved earns interest. Interest allows your money to grow and become more than what you originally saved. In short, money saved is money earned. The interest is usually paid by a bank or a company where you have deposited the money you have saved. There are generally two types of interest you can earn. The first is simple interest, and the second is compound interest.
Q. Explain the term doubling period with an illustration?
Answer: If a certain sum of money in a bank is saved, then you can quickly make the money double based on interest. If you save Rs. 100 today, how fast will that amount become Rs. 200? It will depend on what compound interest you are earning on the saving and on a factor called the Rule of 72. The “Rule of 72” is a simplified way to determine how long a saving will take to double, given a rate of interest. By dividing 72 by the rate of interest, you can get a rough estimate of how many years it will take for the initial saving to double itself.
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