ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Price
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Principle
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Payment
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Rate
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Detailed explanation-1: -P = principal. r = rate of interest. n = number of times interest is compounded per year. t = time (in years)
Detailed explanation-2: -P stands for principal; i stands for interest; n stands for the number of compounding periods.
Detailed explanation-3: -SI = Simple interest. P = Principal (sum of money borrowed) R = Rate of interest p.a.
Detailed explanation-4: -P is Present Value or Principal. The present value is the amount borrowed or invested at the beginning of a period.
Detailed explanation-5: -The simple interest formula is I = Prt where. I = interest earned r = annual interest rate ( stated as a decimal) P = principal t = time (in years) Interest rates are quoted for periods of one year and when used in a formula must be converted to a decimal fraction.