ECONOMICS
COMPOUND INTEREST
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A = P(2+r)t
|
|
|
I= Prt
|
|
|
A2 + B2 = C2
|
|
|
A = P(1+r)t
|
Detailed explanation-1: -The simple interest formula is A=P(1+r)t A = P ( 1 + r ) t where P represents the amount originally deposited, r is the interest rate, and A is the amount in the account at t years.
Detailed explanation-2: -Calculate Rate using Rate Percent = n[ ( (A/P)^(1/nt) )-1] * 100. In this example we start with a principal of 10, 000 with interest of 500 giving us an accrued amount of 10, 500 over 2 years compounded monthly (12 times per year). If you paste this correctly you should see the answer for Rate % = 2.44 in cell B1.
Detailed explanation-3: -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: -Simple Interest Formula 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.