Login or Sign Up

Ask a New Question

What are the compound amount and compound interest at the end of three years if birr 10,000 is borrowed annual interest rate 8%

A compound monthly
B compound quarterly
C compounded semi annally
D compounded annually
E compounded continously

the general formula, which you already know, but refuse to apply, is

A = P(1 + r/n)^(nt)

so plug and chug

for continuous, that becomes just A = Pe^(1+r)

oops --- A = Pe^(rt)

Did you know?

Did you know that the compound amount and compound interest vary depending on the frequency at which interest is compounded? For instance, if birr 10,000 is borrowed with an annual interest rate of 8%, the compound amount and compound interest at the end of three years would differ based on different compounding frequencies. Here is a quick breakdown: A) If interest is compounded monthly, the compound amount and compound interest would be different compared to other frequencies. B) If interest is compounded quarterly, the compound amount and compound interest would be different compared to monthly and other frequencies. C) If interest is compounded semi-annually, the compound amount and compound interest would be different compared to quarterly, monthly, and other frequencies. D) If interest is compounded annually, the compound amount and compound interest would be different compared to semi-annually, quarterly, monthly, and other frequencies. E) If interest is compounded continuously, the compound amount and compound interest would be different compared to all the previous frequencies. So, the frequency of compounding plays a crucial role in determining the final compound amount and compound interest.