ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$270.75
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$745.75
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$2, 707.50
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$846.80
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Detailed explanation-1: -The compound interest formula is ((P*(1+i)^n)-P), where P is the principal, i is the annual interest rate, and n is the number of periods. Using the same information above, enter “Principal value” into cell A1 and “1000” into cell B1.
Detailed explanation-2: -When it comes to investing, compound interest is better since it allows funds to grow at a faster rate than they would in an account with a simple interest rate. Compound interest comes into play when you’re calculating the annual percentage yield. That’s the annual rate of return or the annual cost of borrowing money.
Detailed explanation-3: -The interest, typically expressed as a percentage, can be either simple or compounded. Simple interest is based on the principal amount of a loan or deposit. In contrast, compound interest is based on the principal amount and the interest that accumulates on it in every period.
Detailed explanation-4: -Now Compound interest = A-P ⇒ Compound interest = Rs. 15972-Rs. 12000 = Rs. 3972.