ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Leroy borrowed $1500 at an annual simple interest rate of 12%. He paid $270 in interest. For what time period did Leroy borrow the money? Remember, your answer will be in years!
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8 years
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0.015 years
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1.5 years
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18 years
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Explanation:
Detailed explanation-1: -The time taken for the loan will be 18 months. T = 18 months.
Detailed explanation-2: -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.
Detailed explanation-3: -The one-time interest rate is 1.5%. But before you can use the rate of 1.5% you must convert it to a decimal. To change percent to a decimal, divide by 100: 1.5% ÷ 100 = 0.015.
Detailed explanation-4: -To calculate simple interest, the formula used is (P x r x t)/100 where P, r, and t stands for principal amount, rate of interest and tenure of the deposit in years.
There is 1 question to complete.