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A $5000 investment at an annual simple interest rate of 4.4% earned as much interest after one year as another investment in an account that earned 5.5% annual simple interest. How much was invested at 5.5%?
1,820-apex test answer
compunding
Banks do not offer compound interest on the money deposited into the savings accounts. They offer only simple interest. However, this interest is compounded every month or quarter in order for the customer to gain full benefits of the same. Ex: let us say you hold Rs. 10,000/- in your bank account and as per the prevailing interest rate of 3.5% for a savings account, your interest for the first month will be 29.17 rupees. If the interest is compounded every month, the principal amount used for calculation of interest for the second month will be 10,029.17/- and the effective interest you earn the second month will be Rs. 29.25/- this way the interest will get added up with the principal amount every month to earn a extra few rupees into your account as interest.
Its where your savings account earns interest on the interest.
1282.5
835.00, 860.05, 885.10, 910.15, 935.20,
Interest = Principal*Time*Rate = 950*4*3% = 950*4*3/100 = 114
3% for 4 years is equivalent to 12% of the principal, in this case 12 x 9.5 which is 114.
Let P be the amount of invested money. Then, .08P = 336 P = 336/.08 = 4,200
The total value of the deposit will be $1248.929 at the end of 5 years. The year wise ending balance would be:918991.441070.7551156.4161248.929 This is under the assumption that the interest of 8% is compounded annually.
Campound interest
There is 936.76
Compound interest increases the amount earned by adding credited interest to the principal, and interest will then be earned on that money as well. The longer the principal and interest remain in the account, the greater the earnings they will accrue.
compunding
An owner's savings account is also known as the owner's equity account. The owner's equity account keeps track of deposits and withdrawals to the account, and how much principal the owner has invested in the business.
$2275.28