ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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How much interest will an investment of $6400 earn over 6 years if the interest is compounded annually at 5%
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$8, 576.61
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$2176.61
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$1920
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$14976.61
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Explanation:
Detailed explanation-1: -64=32% quarteralyPeriod (n) = 6 months = 2 quaters∴ Amount = P (1+R100)n=Rs. 40000 (1+32×100)2=Rs. 40000×203200×203200=Rs. 41209C.I.
Detailed explanation-2: -Hence, the compound interest on Rs. 6, 400 for 2 years, compounded annually at 7.5% per annum is Rs. 996.
Detailed explanation-3: -Given, P = Rs. 1, 500. R = 10% Time = 6 years. Formula: A = P (1 + r/100)t A = Amount, P = Principal, r = rate and t = time. If interest compounded every 2 years, then. Time = t/2. Calculation: Rate = 2 × 10 = 20% Time = 6/2 = 3 years. ⇒ A = 1500 (1 + 20/100)3 ⇒ A = 1500 × (6/5) × (6/5) × (6/5) 22-Sept-2022
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