ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Carson invested $675 into a savings account that earns 4.5% simple interest. How much interest will his money earn after 3 years?
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$911.25
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$766.13
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$95.29
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$91.13
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Explanation:
Detailed explanation-1: -According to the Rule of 72, it would take about 14.4 years to double your money at 5% per year.
Detailed explanation-2: -Detailed Solution 815 in 3 years. The same money is amount to Rs. 854 in 4 years. ∴ The sum is 698.
Detailed explanation-3: -Hence, Compound interest will be 51.25 Rs.
Detailed explanation-4: -Explanation: The simple interest formula is given by I = PRt where I = interest, P = principal, R = rate, and t = time. Here, I = 10, 000 * 0.09 * 5 = $4, 500. The total repayment amount is the interest plus the principal, so $4, 500 + $10, 000 = $14, 500 total repayment.
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