ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$387.60
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$855.54
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$467.94
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$785.35
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Detailed explanation-1: -There are different types of savings accounts to choose from, and they’re not all alike. The options include traditional savings accounts, high-yield savings accounts, money market accounts, certificates of deposit, cash management accounts and specialty savings accounts.
Detailed explanation-2: -Here’s the simple interest formula: Interest = P x R x T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
Detailed explanation-3: -How is savings interest calculated? To work out the amount of interest paid on your savings account, you can multiply your account balance by the interest rate you received, then the number of years your money’s been in the account.
Detailed explanation-4: -A certificate of deposit (CD) account is an alternative to a traditional savings account. A CD account typically requires a higher minimum balance than savings accounts, and your funds will usually remain on deposit for a fixed period of time (the “term” of the account).