ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Johnny takes an undisclosed sum of money and deposits it in a bank at an interest rate of 2%. He leaves the money in the account for 6 years, compounded quarterly. If the Johnny withdraws after 6 years is $455, 125, what was the sum of money he deposited?
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$403 780
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$404 138
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$406 362
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$436 870
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Explanation:
Detailed explanation-1: -Therefore, it will take 50 years to get the double amount at a simple interest rate 2 % per annum.
Detailed explanation-2: -Hence, the compound interest is Rs 1260.
Detailed explanation-3: -You simply take 72 and divide it by the interest rate number. So, if the interest rate is 6%, you would divide 72 by 6 to get 12. This means that the investment will take about 12 years to double with a 6% fixed annual interest rate.
Detailed explanation-4: -∴ Amount will be Rs. 3025 and Interest will be Rs. 525 If Compounded Annually.
There is 1 question to complete.