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How compound interest formula is helpful for a financial institution in order to calculate the amount due by customers?
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.
What else can I help you with?
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?
As a verb, it means to make something more than it is by adding more of something else. The accent is on the second syllable. As a noun, it means a substance which has one or more other substances added. The accent is on the first syllable.
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 the molecular mass of a compound?
To calculate the molecular mass of a compound, you add up the atomic masses of all the atoms in the compound. This can be found on the periodic table.
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 percent by mass of an element in a compound?
To calculate the percent by mass of an element in a compound, you divide the mass of the element by the total mass of the compound and then multiply by 100. This gives you the percentage of the compound's mass that is made up of that specific element.
How do you calculate the grams of an element in a specific amount of a compound?
To calculate the grams of an element in a compound, you need to find the molar mass of the element and the compound. Then, use the formula: (mass of element/molar mass of compound) x molar mass of element. This will give you the grams of the element in the compound.
How do you calculate the molar mass of a compound?
To calculate the molar mass of a compound, you add up the atomic masses of all the elements in the compound as indicated by its chemical formula. The atomic masses can be found on the periodic table.
How do you find water by mass in a compound?
To find water by mass in a compound, you can calculate the difference in mass before and after heating the compound to drive off the water. The lost mass represents the mass of water present in the compound. You can then calculate the percentage of water in the compound by dividing the mass of water by the total mass of the compound and multiplying by 100.
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
How do you calculate the enthalpy of formation for a chemical compound?
To calculate the enthalpy of formation for a chemical compound, you subtract the enthalpies of formation of the reactants from the enthalpies of formation of the products. This gives you the overall change in enthalpy for the reaction, which represents the enthalpy of formation for the compound.
What is the at formula used to calculate the percentage composition of a specific element in a compound?
The at formula is used to calculate the percentage composition of a specific element in a compound. It is calculated by dividing the atomic mass of the element by the molar mass of the compound, and then multiplying by 100 to get the percentage.
What is the significance of Einstein's quote on compound interest in the context of real-life financial planning?
Einstein's quote on compound interest highlights the power of this financial concept in growing wealth over time. It emphasizes the importance of starting to save and invest early to take advantage of compounding. In real-life financial planning, understanding and utilizing compound interest can help individuals build substantial savings and achieve long-term financial goals.
How do you calculate the oxidation state of carbon in a compound?
To calculate the oxidation state of carbon in a compound, you assign a charge based on the number of electrons it gains or loses in a chemical reaction. This can be determined by considering the electronegativity of the other elements in the compound and following specific rules for assigning oxidation states.
