ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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40%
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4%
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0.4%
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8%
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Detailed explanation-1: -To generate $2, 035 of simple interest at 6% over a time frame of 11 months, $37, 000 must be invested.
Detailed explanation-2: -Using the interest rate formula, we get the interest rate, which is the percentage of the principal amount, charged by the lender or bank to the borrower for the use of its assets or money for a specific time period. The interest rate formula is Interest Rate = (Simple Interest × 100)/(Principal × Time).
Detailed explanation-3: -The simple interest formula states that interest is equal to the principal times the rate times the time. Interest lets you gain value over time. I=PRT.
Detailed explanation-4: -How Do You Find the Principal Amount? The formula for calculating the principal amount when there is simple interest is P = I / (RT), which is the interest amount divided by the interest rate times the amount of time.