BUSINESS ADMINISTRATION
BUSINESS MATHEMATICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The amount of interest earned.
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The amount of time that has passed.
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The total amount of money after a certain amount of time.
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The amount required to invest.
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Detailed explanation-1: -A represents the new principal sum or the total amount of money after compounding period. P represents the original amount or initial amount. r is the annual interest rate.
Detailed explanation-2: -Compound interest, can be calculated using the formula FV = P*(1+R/N)^(N*T), where FV is the future value of the loan or investment, P is the initial principal amount, R is the annual interest rate, N represents the number of times interest is compounded per year, and T represents time in years.
Detailed explanation-3: -It is governed by the formula: I = Prt. where I is the amount of interest, P is the principal (amount of money borrowed), r is the interest rate (per year), and t is the time (expressed in years).
Detailed explanation-4: -The formula for calculating compound interest is P = C (1 + r/n)nt – where ‘C’ is the initial deposit, ‘r’ is the interest rate, ‘n’ is how frequently interest is paid, ‘t’ is how many years the money is invested and ‘P’ is the final value of your savings.
Detailed explanation-5: -Compound interest is the interest you earn on interest. This can be illustrated by using basic math: if you have $100 and it earns 5% interest each year, you’ll have $105 at the end of the first year. At the end of the second year, you’ll have $110.25.