ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$3.25
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$4.75
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$3.75
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$4.25
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Detailed explanation-1: -For example, if you borrow $100 with a 5% interest rate, you will pay $105 dollars back to the lender you borrowed from. The lender will make $5 in profit.
Detailed explanation-2: -Here’s the simple interest formula: Interest = P x R x T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
Detailed explanation-3: -Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow? Answer: C, more than $102.
Detailed explanation-4: -How is savings interest calculated? To work out the amount of interest paid on your savings account, you can multiply your account balance by the interest rate you received, then the number of years your money’s been in the account.