ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A = P(1+r)^t
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I = Prt
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a^2 + b^2 = c^2
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y = mx + b
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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: -Compound interest, can be calculated using the formula FV = P*(1+R/N)^(N*T), where FV is the future value of the loan or investment, P is the initial principal amount, R is the annual interest rate, N represents the number of times interest is compounded per year, and T represents time in years.
Detailed explanation-3: -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.