ECONOMICS
COMPOUND INTEREST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$18, 441.10
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$6, 241.10
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$30, 441.10
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$16, 441.10
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Detailed explanation-1: -You can calculate your total interest by using this formula: Principal loan amount x interest rate x loan term = interest.
Detailed explanation-2: -For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money. Note that a compound annual return of 8% is plugged into this equation as 8, and not 0.08, giving a result of nine years (and not 900).
Detailed explanation-3: -The future value of a $1000 investment today at 8 percent annual interest compounded semiannually for 5 years is $1, 480.24. It is computed as follows: FutureValue=1, 000∗(1+i)n.
Detailed explanation-4: -Simply divide the number 72 by the annual rate of return to determine how many years it will take to double. For example, $100 with a fixed rate of return of 8% will take approximately nine (72 / 8) years to grow to $200.