ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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James needs 1200 to fund a project. He borrows the money off the bank at an interest rate of 4.5% for 3 years compounded annually. Calculate how much interest he pays (not the total amount)
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1369.40
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1268
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169.40
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162
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Explanation:
Detailed explanation-1: -∴ The compound interest is Rs. 205.
Detailed explanation-2: -488.86. Hence, Compound interest would be Rs. 488.86.
Detailed explanation-3: -Here’s the simple interest formula: Interest = P x R x T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
There is 1 question to complete.