ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
A compound interest account has accrued an account balance of $1, 159.27 over the course of 5 years. The interest rate paid was 3%. Which is closest to the principal amount on the account?
|
|
$1, 000
|
|
|
$1, 300
|
|
|
$300
|
|
|
$4, 300
|
Explanation:
Detailed explanation-1: -Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. The total initial amount of the loan is then subtracted from the resulting value.
Detailed explanation-2: -Rate of interest = 12% p.a. ∴ The compound interest is Rs. 10123.20.
Detailed explanation-3: -I believe you are asking if we have an annual rate of 12%, compounded monthly, how long to double? X = 69.66 or at 70 months. Please appreciate it by marking it as brainliest.
Detailed explanation-4: -Using the rule of 72, you would estimate that an investment with a 5% compound interest rate would double in 14 years (72/5).
There is 1 question to complete.