ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$403.20
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$36.29
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$254.02
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$640
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Detailed explanation-1: -The simple interest formula is I = Prt where. I = interest earned r = annual interest rate ( stated as a decimal) P = principal t = time (in years) Interest rates are quoted for periods of one year and when used in a formula must be converted to a decimal fraction.
Detailed explanation-2: -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.
Detailed explanation-3: -Simple interest is calculated with the following formula: S.I. = P × R × T, where P = Principal, R = Rate of Interest in % per annum, and T = Time, usually calculated as the number of years.
Detailed explanation-4: -Principal = (100 × Interest)/(Rate × Time) Therefore, Principal (P) = $ 5000.