ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
$14, 400.00
|
|
|
$2, 880.00
|
|
|
$17, 280.00
|
|
|
$2, 000.00
|
Detailed explanation-1: -How does the rule of 72 work? Using the rule of 72, you would estimate that an investment with a 5% compound interest rate would double in 14 years (72/5).
Detailed explanation-2: -The longer the investor can allow their returns to compound, the more money they may be able to make. As a result, investors may want to consider compounding as more a part of a long-term investment strategy than a short-term strategy.
Detailed explanation-3: -➭So, compound interest is earned by investing 20, 000 for 6 years at 5% per annum compounded annually. is Rs. 6801. 90.
Detailed explanation-4: -Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one.