ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -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.
Detailed explanation-2: -P = Rs. 2500 Amount = C.I = A-P = Rs. 3025-2500 = Rs. 525.
Detailed explanation-3: -Now we have to calculate compound interest. So, the compound interest on Rs $10000$ in $2$ years at $4%$ per annum being compounded half yearly is $Rs. 824.32$. So, the correct answer is “Option C”.
Detailed explanation-4: -To calculate simple interest, multiply the principal amount by the interest rate and the time. The formula written out is “Simple Interest = Principal x Interest Rate x Time.” This equation is the simplest way of calculating interest.