ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Caiden earned $475 from mowing lawns last summer. He deposited this money in an account that pays an interest rate of 3.8% compounded annually. How much interest will he have earned after 15 years?
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$827.52
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$831.10
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$839.45
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$846.80
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Explanation:
Detailed explanation-1: -Now Compound interest = A-P ⇒ Compound interest = Rs. 15972-Rs. 12000 = Rs. 3972.
Detailed explanation-2: -Generally, simple interest paid or received over a certain period is a fixed percentage of the principal amount that was borrowed or lent. Compound interest accrues and is added to the accumulated interest of previous periods, so borrowers must pay interest on interest as well as principal.
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