ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$45, 689
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$240, 689
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$195, 000
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$41, 925
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Detailed explanation-1: -You can calculate your total interest by using this formula: Principal loan amount x interest rate x loan term = interest.
Detailed explanation-2: -Here’s the formula for calculating compound interest: CI = P (1+r/n) ^nt – P. To solve, plug the described information into the designated spots. Then divide the rate (r) by the number of times compounded (n) and add it to one.
Detailed explanation-3: -A = P (1 + r / m) mt P (Initial value of investment) = $ 5, 000. r (rate of return) = 10% compounded annually. m (number of the times compounded annually) = 1. t (number of years for which investment is made) = three years.
Detailed explanation-4: -Effective Rate on a Simple Interest Loan = Interest/Principal = $60/$1, 000 = 6% Effective rate on a Loan with a Term of Less Than One Year = $60/$1, 000 X 360/120 = 18% Effective rate on a discounted loan = (60 X 360/360)/($1, 000-60) = 6.38% More items •13-Sept-2022