BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Ahmad plans to invest RM 725 in an account that offers 7% interest rate compounded semiannually for 4 years. Find the amount of interest earned.
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RM 954.69
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RM 229.69
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RM725
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RM 953.00
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Explanation:
Detailed explanation-1: -If an amount is invested at 7% compounded continuously, how long will it take to double? We don’t know the initial value of the principal but we do know that the accumulated value is double (twice) the principal. It takes 9.9 years for money to double if invested at 7% continuous interest.
Detailed explanation-2: -The formula for compounded interest is based on the principal, P, the nominal interest rate, i, and the number of compounding periods. The formula you would use to calculate the total interest if it is compounded is P[(1+i)
There is 1 question to complete.