ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You deposit $5, 000 in an account. What will be the difference between the interest paid? A) Simple interest rate of 6.25% for 2.5 yearsB) 5.5% rate compounded annually for 2.5 years
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$781.25
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$65.13
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$76.53
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$716.12
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Explanation:
Detailed explanation-1: -C.I. = 5618 – 5000 = 618. Therefore, the compound interest is Rs. 618.
Detailed explanation-2: -We need to find the difference between compound interest and simple interest on rupees 5000 of 2 year at 8% per annum payable yearly. Simple interest = (5000 * 8 * 2) / 100 = 800. Compound interest = 5000 [ ( 1 + (8/100)) ^ 2-1 ] = 5000 * 208/100 * 8/100. = 832.
Detailed explanation-3: -The difference between compound interest and simple interest at the same rate on Rs. 5000 for 2 years is Rs. 72 What is the rate of interest per annum ?
There is 1 question to complete.