ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Jerry borrowed $4, 000 for 5 years at 6% simple interest rate. How much interest will he pay by the end of the 5 years?
|
|
$800
|
|
|
$1, 000
|
|
|
$1, 200
|
|
|
$1, 500
|
Explanation:
Detailed explanation-1: -The interest alfred receives is 4000(5×1006)=4000×10030=1200.
Detailed explanation-2: -Answer and Explanation: Alfred will receive the interest amount $ 1, 200 .
Detailed explanation-3: -∴ The amount of Rs. 500 will become Rs. 625 at the rate of 5% per annum in 5 years.
Detailed explanation-4: -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.