ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Monthly means how many times a year?
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4
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12
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52
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365
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Explanation:
Detailed explanation-1: -"12% interest compounded monthly” means that the interest rate is 12% per year (not 12% per month), compounded monthly. Thus, the interest rate is 1% (12% / 12) per month.
Detailed explanation-2: -If interest is compounded yearly, then n = 1; if semi-annually, then n = 2; quarterly, then n = 4; monthly, then n = 12; weekly, then n = 52; daily, then n = 365; and so forth, regardless of the number of years involved.
Detailed explanation-3: -The average person experiences at least four periods during their first year of menstruation. This number will gradually increase with time, with the average adult having at least nine periods a year. This means that some periods may naturally occur more than 35 days apart.
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