BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What does the “I” in the interest formula stand for?
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Principal
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Interest
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Rate
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Time
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Explanation:
Detailed explanation-1: -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). The formula can also be expressed as: A = P + I = P(1 + rt)
Detailed explanation-2: -The simple interest formula is given by I = PRt where I = interest, P = principal, R = rate, and t = time. Here, I = 10, 000 * 0.09 * 5 = $4, 500. The total repayment amount is the interest plus the principal, so $4, 500 + $10, 000 = $14, 500 total repayment.
Detailed explanation-3: -Solve for interest earned (initial equation): I=P×R×T.
There is 1 question to complete.