ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
annual
|
|
|
amount in account
|
|
|
answer
|
|
|
accrued debt
|
Detailed explanation-1: -A = amount. P = principal. r = rate of interest. n = number of times interest is compounded per year. t = time (in years)
Detailed explanation-2: -If you’d like to calculate a total value for principal and interest that will accrue over a particular period of time, use this slightly more involved simple interest formula: A = P(1 + rt). A = total accrued, P = the principal amount of money (e.g., to be invested), r = interest rate per period, t = number of periods.
Detailed explanation-3: -How Compound Interest Works. Compound interest is calculated by multiplying the initial principal amount by one plus the annual interest rate raised to the number of compound periods minus one. The total initial amount of the loan is then subtracted from the resulting value.
Detailed explanation-4: -The formula for compound interest is A = P(1 + r/n)^nt where P is the principal balance, r is the interest rate, n is the number of times interest is compounded per year and t is the number of years.
Detailed explanation-5: -Monthly Compound Interest Formula. Interest compounded monthly is calculated 12 times in a year. Compounded Quarterly Formula. Interest compounded quarterly is calculated four times in a year. Daily Compound Interest Formula. Annual Compound Interest Formula. 15-Jul-2021