ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Your 3 year investment of $20, 000 received 5.2% interest compounded annually. What will your total balance be at the end?
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$23, 285.05
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$3, 285.05
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$2, 385
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$32, 285
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Explanation:
Detailed explanation-1: -According to the Rule of 72, it would take about 14.4 years to double your money at 5% per year.
Detailed explanation-2: -interest compounded annually. noun [ U ] FINANCE. a method of calculating and adding interest to an investment or loan once a year, rather than for another period: If you borrow $100, 000 at 5% interest compounded annually, after the first year you would owe $5, 250 on a principal of $105, 000.
Detailed explanation-3: -AI Recommended Answer: equivalent to 14% compounded quarterly is 14.14%.
Detailed explanation-4: -If compound interest is paid twice per year, the compounding period is six months and we say that the interest is compounded semiannually.
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