ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Compounded weekly means how many times a year?
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51
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5.2
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.52
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52
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54
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Explanation:
Detailed explanation-1: -The plan with an 18.2 percent interest rate per year is compounded weekly. This means that interest is added weekly to the account. And as there are 52 weeks in the year, near enough, this means that interest is added 52 times per year.
Detailed explanation-2: -Weekly Compounding Some savings and investment accounts compound weekly instead of daily. Instead of dividing your annual interest rate by 365, you would divide by 52. At the end of one week, your new balance would be $5, 004.81 and at the end of a year, it would be $5, 256.23.
Detailed explanation-3: -Example: “10%, Compounded Semiannually" Semiannual means twice a year.
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