ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bridget deposited $2500 into a saving account at 5% interest . She didn’t deposit or withdraw any money for the next 10 years. At the end of the 10 years, there was $3125 in the account. How much interest did she earn?
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$625
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$2500
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$125
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$5625
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Explanation:
Detailed explanation-1: -I=10020000×2×5=Rs. 2, 000. Was this answer helpful?
Detailed explanation-2: -How does the rule of 72 work? Using the rule of 72, you would estimate that an investment with a 5% compound interest rate would double in 14 years (72/5).
Detailed explanation-3: -Simple Interest Formula Thus, if simple interest is charged at 5% on a $10, 000 loan that is taken out for three years, then the total amount of interest payable by the borrower is calculated as $10, 000 x 0.05 x 3 = $1, 500.
Detailed explanation-4: -The future value of $10, 000 with 6 % interest after 5 years at simple interest will be $ 13, 000.
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