ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Time, in hours
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Time, in days
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Time, in months
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Time, in years
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Detailed explanation-1: -P represents Principal Amount. R represents Rate of Interest. T represents Time.
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: -In the simple-interest formula I = Prt, the variable I stands for the interest on the original investment, P stands for the amount of the original investment (called the “principal"), r is the interest rate (expressed in decimal form), and t is the time. For annual interest, the time t must be in years.
Detailed explanation-4: -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-5: -Simple interest is calculated with the following formula: S.I. = P × R × T, where P = Principal, R = Rate of Interest in % per annum, and T = Time, usually calculated as the number of years. The rate of interest is in percentage r% and is to be written as r/100.