ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
Principal:$5000Interest Rate:3.75%Time:25 yearsCompounded Monthly
|
|
$12712.31
|
|
|
$12, 749.30
|
|
|
$12, 657.59
|
|
|
$12550.84
|
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: -☆ Solution ☆ The required compound interest is ₹ 1272.
Detailed explanation-3: -How to Calculate Compound Interest? P is principal, I is interest rate, n is number of compounding periods. An investment of Rs 1, 00, 000 for 5 years at 12% rate of return compounded annually is worth Rs 1, 76, 234.
Detailed explanation-4: -The formula of monthly compound interest is: CI = P(1 + (r/12) )12t-P where, P is the principal amount, r is the interest rate in decimal form, and t is the time.
There is 1 question to complete.