ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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You lend $240 to your friend. He pays you back $30 in interest in one year. What interest rate did you charge your friend?
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88%
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20%
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12.5%
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10%
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Explanation:
Detailed explanation-1: -Hence, at the end of 3 years, the simple interest is $787.5.
Detailed explanation-2: -Simple Interest Formula 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.
Detailed explanation-3: -r = annual rate of interest (as a decimal) t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest.
Detailed explanation-4: -How much interest is that? The simple interest formula is I=Prt. The P represents the principal.
There is 1 question to complete.