ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Suzette deposited $800 into a bank account earning simple interest of 2.5% each year. After 5 years, how much interest had her account earned?
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$100
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$900
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$1000
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$1800
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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: -Hence, one can double his or her money in 20 years at a 5% simple interest rate.
Detailed explanation-3: -Simple Interest Formula Thus, if simple interest is charged at 5% on a $10, 000 loan that is taken out for three years, then the total amount of interest payable by the borrower is calculated as $10, 000 x 0.05 x 3 = $1, 500.
Detailed explanation-4: -Hence, Compound interest will be 51.25 Rs.
There is 1 question to complete.