InterviewSolution
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1). 12 percent2). 6 percent3). 24 percent4). 18 percent |
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Answer» The formula for annual compound interest, including principal sum, is: $(CI\; = \;P{\left( {1\; + \;\FRAC{r}{{100\; \times \;N}}} \RIGHT)^{nt}} - P)$ Where: CI = Compound InterestP = the principal investment amount (the initial deposit or LOAN amount)r = the annual interest rate (decimal)n = the number of times that interest is compounded per yeart = the number of years the money is INVESTED or borrowed for Here n = 2 Let the principal be P SI = (P × r × 2)/100 = 2400 Pr = 120000 CI = P(1 + r/100)2 – P = 2544 P(1 + r2/10000 + 2r/100) – P = 2544 (Pr) × r/10000 + Pr/50 = 2544 120000r/10000 + 2400 = 2544 r = 12% |
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