ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Raul borrowed $4, 000 from Ford Motor Credit Company for 5 years at 6% simple interest rate. How much interest is that?
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$800
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$1, 000
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$1, 200
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$1, 500
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Explanation:
Detailed explanation-1: -5% = 0.05 . Then multiply the original amount by the interest rate. $1, 000 * 0.05 = $50 . That’s it.
Detailed explanation-2: -To calculate simple interest, multiply the principal amount by the interest rate and the time. The formula written out is “Simple Interest = Principal x Interest Rate x Time.” This equation is the simplest way of calculating interest.
Detailed explanation-3: -The simple interest of a loan for $1, 000 with 5 percent interest after 3 years is $ 150.
There is 1 question to complete.