ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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8 years
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0.015 years
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18 months
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18 years
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Detailed explanation-1: -The time taken for the loan will be 18 months.
Detailed explanation-2: -The total amount repaid is called the future value. The original principal, P, is the present value. The future value of a simple interest loan, denoted A, is given by A = P(1 + rt).
Detailed explanation-3: -Simple interest is calculated with the following formula: S.I. = P × R × T, where P = Principal, R = Rate of Interest in % per annum, and T = Time, usually calculated as the number of years. The rate of interest is in percentage r% and is to be written as r/100.
Detailed explanation-4: -P = Principal Amount. I = Interest Amount. r = Rate of Interest per year in decimal; r = R/100. R = Rate of Interest per year as a percent; R = r * 100. t = Time Period involved in months or years.