ECONOMICS (CBSE/UGC NET)

ECONOMICS

COMPOUND INTEREST

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

John wants to open a showroom and borrows $48, 000 on 12% interest rate. He plans to pay this after 4 years. What will that total principal + interest payment be?

A	$67, 500
B	$72, 050
C	$70, 600
D	$71, 040

Explanation:

Detailed explanation-1: -About how many years will P100, 000 earn a compound interest of P50, 000 if the interest rate is 9% compounded quarterly? Explanation: 526.

Detailed explanation-2: -Compound interest, can be calculated using the formula FV = P*(1+R/N)^(N*T), where FV is the future value of the loan or investment, P is the initial principal amount, R is the annual interest rate, N represents the number of times interest is compounded per year, and T represents time in years.

Detailed explanation-3: -A = P (1 + r / m) mt P (Initial value of investment) = $ 5, 000. r (rate of return) = 10% compounded annually. m (number of the times compounded annually) = 1. t (number of years for which investment is made) = three years.

Detailed explanation-4: -The formula for compound interest is A = P(1 + r/n)^nt where P is the principal balance, r is the interest rate, n is the number of times interest is compounded per year and t is the number of years.

There is 1 question to complete.