ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Monica is depositing $6, 000 into a savings with an interest rate of 4.25% for 8 years. How much more interest will she earn if the interest is compounded annually, as opposed to simple interest?
|
|
$2040.00
|
|
|
$2370.66
|
|
|
$330.66
|
|
|
$5669.34
|
Explanation:
Detailed explanation-1: -’Find the total amount of interest to the nearest cent if the interest $ comi unded annually. $2750at 8% for 2 years P-S2750 0.08 years Total interest =Accrued Amount $ $2750 =$ 457.60’
Detailed explanation-2: -Compound interest causes your wealth to grow faster. It makes a sum of money grow at a faster rate than simple interest because you will earn returns on the money you invest, as well as on returns at the end of every compounding period. This means that you don’t have to put away as much money to reach your goals!
There is 1 question to complete.