ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A simple interest account earns $75 at a rate of 1.5% over the course of 5 years. What was the principal amount on the account?
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$5
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$56
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$100
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$1, 000
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Explanation:
Detailed explanation-1: -488.86. Hence, Compound interest would be Rs. 488.86.
Detailed explanation-2: -To solve the above-given problem we will use a direct formula of finding the difference between compound interest & simple interest for 3 years. Thus, the principal amount is Rs. 15360.
Detailed explanation-3: -Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”
There is 1 question to complete.