ECONOMICS
COMPOUND INTEREST
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Question
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Bilbo Baggins earned $475 from walking long distances last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. What will be his balance after 2 years?
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$180.50
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$511.79
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$361.00
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$ 36.10
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Explanation:
Detailed explanation-1: -Now Compound interest = A-P ⇒ Compound interest = Rs. 15972-Rs. 12000 = Rs. 3972.
Detailed explanation-2: -Compound interest is the interest on savings calculated on both the initial principal and the accumulated interest from previous periods. more. Annual Percentage Rate (APR): What It Means and How It Works.
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