ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$1, 584.62 the train station
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$1, 651.39 the movie theater
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$1, 706.86 the art museum
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$1, 893.45 the bakery
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Detailed explanation-1: -How much interest can you earn on $1, 000? If you’re able to put away a bigger chunk of money, you’ll earn more interest. Save $1, 000 for a year at 0.01% APY, and you’ll end up with $1, 000.10. If you put the same $1, 000 in a high-yield savings account, you could earn about $5 after a year.
Detailed explanation-2: -How much will an investment of $20, 000 be worth in the future? At the end of 20 years, your savings will have grown to $64, 143. You will have earned in $44, 143 in interest. How much will savings of $20, 000 grow over time with interest?
Detailed explanation-3: -Effective today, Series EE savings bonds issued May 2022 through October 2022 will earn an annual fixed rate of .10% and Series I savings bonds will earn a composite rate of 9.62%, a portion of which is indexed to inflation every six months.
Detailed explanation-4: -A compound interest account pays interest on both your initial investment plus any interest previously accrued. This interest-upon-interest appreciation is the “compounding” factor that grows with time. Simple interest accounts, on the other hand, only pay interest on the original principal.