ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What is the value of n if the question asks you to compound daily?
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12
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1
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365
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4
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Explanation:
Detailed explanation-1: -When the amount compounds daily, it means that the amount compounds 365 times in a year. i.e., n = 365.
Detailed explanation-2: -r = the interest rate. n = the number of times that interest is compounded per period. t = the number of periods.
Detailed explanation-3: -To calculate daily compound interest, the interest rate will be divided by 365, and the number of years (n) will be multiplied by 365.
Detailed explanation-4: -Daily Compounding If interest is compounding daily, that means that there are 365 periods per year and that the periodic interest rate is . 00548%.
There is 1 question to complete.