ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Hernan is taking out a loan for $10, 000. His choices for the loan are a 4 year loan at 4% simple interest or a 6 year loan at 5% simple interest. What is the difference in the amount of interest Hernan would have to pay for these 2 loans?
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$1600
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$3000
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$4600
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$1400
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Explanation:
Detailed explanation-1: -Interest on Loan = P * r * t where, P = Outstanding principal sum. r = Rate of interest. t = Tenure of loan / deposit.
Detailed explanation-2: -488.86. Hence, Compound interest would be Rs. 488.86.
Detailed explanation-3: -Given: SI = 100. r = 10% t = 6 month = 6/12 year. Concept used: SI = Prt/100. P → princiapl r → rate of interest. Calculation: 100 = (P × 10 × 6)/(12 × 100) P = (100 × 100 × 12)/(10 × 6) P = 2000. Download Soln PDF. Share on Whatsapp.
Detailed explanation-4: -Convert the annual rate from a percent to a decimal by dividing by 100: 10/100 = 0.10. Now divide that number by 12 to get the monthly interest rate in decimal form: 0.10/12 = 0.0083. More items •03-Jun-2022
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