Knowee
Questions
Features
Study Tools

Compound interest is calculated using the:A.principal investment.B.principal deposit.C.principal plus simple interest.D.principal plus interest already earned.

Question

Compound interest is calculated using the:

  • A. principal investment.
  • B. principal deposit.
  • C. principal plus simple interest.
  • D. principal plus interest already earned.
🧐 Not the exact question you are looking for?Go ask a question

Solution

The correct answer is D. Compound interest is calculated using the principal plus interest already earned.

Here's a step-by-step explanation:

  1. The principal is the initial amount of money that you invest or loan.

  2. The interest is the money that you earn from the investment or owe on a loan.

  3. Simple interest is calculated only on the principal. For example, if you invest 1000witha51000 with a 5% annual interest rate, you would earn 50 in interest each year.

  4. Compound interest, on the other hand, is calculated on the principal plus any interest that has already been earned. So, if you were to invest $1000 with a 5% annual interest rate

This problem has been solved

Similar Questions

what is the formula for the rate of interest of an investment compounded monthly?

Calculate the principal if an amount of Rs. 441 is received on compound interest at the rate of 5%per annum after 2 years

The difference between simple and compound interests compounded annually on a certain sum of money for 3 years at 5% per annum is Rs. 40. The sum s:

The difference between the simple interest and the compound interest on a sum of money at 5% p.a. for 3 years is ₹122. Find the sum.₹12,000₹8,000₹16,000₹20,000

Find compound interest on a sum of ₹ 8000 for 9 months at 20% per annum, if the interest is being compounded quarterly.₹ 1050₹ 2522₹ 2100₹ 1261

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.