ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$975
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$7475
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$1035.28
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$5525
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Detailed explanation-1: -To calculate simple interest, multiply the principal amount by the interest rate and the time. The formula written out is “Simple Interest = Principal x Interest Rate x Time.” This equation is the simplest way of calculating interest.
Detailed explanation-2: -SI = (P x R x T) / 100 P = Principal amount (invested or borrowed) R = Rate of interest. T = Time period (investment or loan repayment)
Detailed explanation-3: -The one-time interest rate is 1.5%. But before you can use the rate of 1.5% you must convert it to a decimal. To change percent to a decimal, divide by 100: 1.5% ÷ 100 = 0.015.
Detailed explanation-4: -Simple Interest For example, if you borrowed $100 from a friend and agree to repay it with 5% interest, then the amount of interest you would pay would just be 5% of 100: $100(0.05) = $5. The total amount you would repay would be $105, the original principal plus the interest.