ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a. on a semiannual basis A = P (1 + r/n)^nt
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A = P (1 + r)^t
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A = P (1 + r/t)^nt
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A = P (1 + n/r)^nt
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Detailed explanation-1: -Hence, the formula to find just the compound interest is as follows: CI = P (1 + r/n)nt-P. In the above expression, P is the principal amount. r is the rate of interest(decimal obtained by dividing rate by 100)
Detailed explanation-2: -The formula for compounded interest is based on the principal, P, the nominal interest rate, i, and the number of compounding periods. The formula you would use to calculate the total interest if it is compounded is P[(1+i)^n-1].
Detailed explanation-3: -The formula for calculating compound interest is P = C (1 + r/n)nt – where ‘C’ is the initial deposit, ‘r’ is the interest rate, ‘n’ is how frequently interest is paid, ‘t’ is how many years the money is invested and ‘P’ is the final value of your savings.