ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Davy earned $10, 000 from his hat company. He deposited it into an account that earns 3% simple interest. How much INTEREST does he earn after 4 years?
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$11, 255.09
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$1255.09
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$1200
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$11, 200
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Explanation:
Detailed explanation-1: -∴ C.I. = ₹(10824.32-10000) = ₹824.32.
Detailed explanation-2: -Now we have to calculate compound interest. So, the compound interest on Rs $10000$ in $2$ years at $4%$ per annum being compounded half yearly is $Rs. 824.32$. So, the correct answer is “Option C”.
Detailed explanation-3: -10, 000 at 2% per annum for 3 years. Assuming interest is compounded annually. That means Amount = Rs 10, 612.08. Therefore, amount and the compound interest on Rs 10, 000 at 2% per annum for 3 years are Rs 10, 612.08 and Rs 612.08 respectively.
Detailed explanation-4: -Detailed Solution. ∴ Difference between interest compounded yearly and half yearly is Rs. 57.81.
There is 1 question to complete.