ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fractions
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mixed numbers
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decimals
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None of the above
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Detailed explanation-1: -In the simple-interest formula I = Prt, the variable I stands for the interest on the original investment, P stands for the amount of the original investment (called the “principal"), r is the interest rate (expressed in decimal form), and t is the time. For annual interest, the time t must be in years.
Detailed explanation-2: -It is governed by the formula: I = Prt. where I is the amount of interest, P is the principal (amount of money borrowed), r is the interest rate (per year), and t is the time (expressed in years).
Detailed explanation-3: -r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest.
Detailed explanation-4: -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.