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How compound interest formula is helpful for a financial institution in order to calculate the amount due by customers?
Wiki User
∙ 14y ago
In fact compound interest is exciting if you're lending but dangerous if you're borrowing as the interest is added to the principal and itself attracts interest.
To calculate compound interest use the Rule of 42. Divide the rate of interest into the number 42 and the answer is the number of periods - usually years when dealing with annual interest - for the principal, i.e. the sum borrowed and therefore the amount to be paid back, to double in value.
Example: borrow $1000 at 6% p.a., pay nothing each year and you will owe $2000 at the end of 7 years.
Conversely, use the rule of 42 to find out the rate of depreciation. If your $10,000 car depreciates at 6% a year then it will be worth $5000 at the end of 7 years.
Wiki User
∙ 14y ago
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What is 'Annual Equivalent Rate'?
Interest payments can calculated annually, quarterly, monthly, daily or even continuously. To enable consumers to compare rates quoted over different periods, many authorities require financial institutions to calculate the total compound interest over a year. That is the AER.
Calculate the sum to which 6000 will amount in 5years at 12 percent per annum compound interest?
5,132.33^10
What does the word compound means?
Compound in interest rates is as thus, compounded monthly means,if you get 3 cents interest this month, next month it compounds to 6 cents and so on! The next month 12 cents, depending on your financial institution and the rise and fall of interest rates.
How do you calculate the compound interest rate?
A= Principle amount(1+ (rate/# of compounded periods))(#of compounding periods x # of years)
What is the corresponding componding?
Corresponding compounding is the interest rate on loan or the financial product restated from nominal interest rate as an interest rate with an annual compound interest.
How do you calculate elemental iron?
To calculate elemental iron from a compound containing iron, you need to determine the percentage of iron in the compound. This can be found on the compound's chemical formula or from the molar mass of the compound. Once you know the percentage of iron, you can use that to calculate the amount of elemental iron present.
What information is needed to calculate the percent composition of a compound?
The formula of the compound and the Atomic Mass of its elements.
How do you calculate the grams of an element in a specific amount of a compound?
Multiply the mass of the compound by the conversion factor based on the percent composition of the element in the compound
What is the enemy of compound interest and makes it very difficult to reach your financial goals?
The enemy of compound interest is debt, especially high-interest debt like credit card debt. By owing money and paying high interest, you are essentially working against the benefits of compound interest, making it harder to grow your wealth and reach your financial goals.
Do you need to know atomic weight to calculate molarity?
No, you do not need to know the atomic weight to calculate molarity. Molarity is calculated by dividing the moles of solute by the volume of solution in liters. Knowing the atomic weight can help determine the number of moles in a given mass of solute, but it is not required to calculate molarity.
How To calculate Specific Heat of A compound Such as NaOH?
To calculate the specific heat of a compound like NaOH, you would need to know the mass of the compound and the energy required to change its temperature by a certain amount. The formula to calculate specific heat is: specific heat = (energy applied)/(mass * temperature change). Once you have these values, you can plug them into the formula to find the specific heat of the compound.
What is the mass percent of oxygen in the compound?
To determine the mass percent of oxygen in a compound, you would calculate the mass of oxygen in the compound and then divide it by the total mass of the compound, before multiplying by 100. The formula is: (mass of oxygen in compound / total mass of compound) x 100%.
What do you need to calculate the percent-age composition of a substance?
The molecular formula of the compound can be calculated from the composition of element in a compound. The next steps are involved in the calculation of percentage of every element in a compound.
How do I calculate compound average growth rate using excel?
use the rate function
How do you calculate grams of a compound in a solution?
To calculate the grams of a compound in a solution, you need to know the concentration of the compound in the solution (in g/L or mg/mL) and the volume of the solution (in liters or mL). Multiply the concentration by the volume to get the total mass of the compound in the solution.
What is 'Annual Equivalent Rate'?
Interest payments can calculated annually, quarterly, monthly, daily or even continuously. To enable consumers to compare rates quoted over different periods, many authorities require financial institutions to calculate the total compound interest over a year. That is the AER.
How do you calculate aggregate saving?
You can calculate aggregate saving by using the power of compounding. The earlier you start saving, the faster you can aggregate or compound your existing savings in the bank.
