ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What does the âtâ represent in the interest formulas?
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Time in months
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Time in years
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Time in days
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None of the above
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Explanation:
Detailed explanation-1: -P = principal. r = rate of interest. n = number of times interest is compounded per year. t = time (in years)
Detailed explanation-2: -t = number of years the amount is deposited or borrowed for. A = amount of money accumulated after n years, including interest.
Detailed explanation-3: -It is governed by the formula: I = Prt. where I is the amount of interest, P is the principal (amount of money borrowed), r is the interest rate (per year), and t is the time (expressed in years).
Detailed explanation-4: -t = time in years. If the interest is compounded yearly, n is 1. If the interest is compounded semi-annually, n is 2. If the interest is compounded quarterly, n is 4.
There is 1 question to complete.