ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rosie will earn $120.27 more than Avery.
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Avery will earn $1540.27 more than Rosie.
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Rosie will earn $1540.27 more than Avery.
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Avery will earn $120.27 more than Rosie.
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Detailed explanation-1: -Solution: Given: P=P7, 300 r=12%=0.12 t=3 years The amount of interest payable at the end of the loan period is I=Prt I=7, 300(0.12)(3) I=P2, 628 The principal will earn an interest of P 2, 628 Example 2.
Detailed explanation-2: -The simple interest formula is given by I = PRt where I = interest, P = principal, R = rate, and t = time. Here, I = 10, 000 * 0.09 * 5 = $4, 500. The total repayment amount is the interest plus the principal, so $4, 500 + $10, 000 = $14, 500 total repayment.
Detailed explanation-3: -Simple Interest Formula 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-4: -Simple Interest For example, if you borrowed $100 from a friend and agree to repay it with 5% interest, then the amount of interest you would pay would just be 5% of 100: $100(0.05) = $5. The total amount you would repay would be $105, the original principal plus the interest.