Question

1. Tanui borrowed sh 12 000 from a bank. The bank charged him a compound interest at the rate of 25% p.a. Find the interest paid:
.1 year
.2 years
.3 years
2. Jean deposited sh 25 000 in a bank which paid compound interest at the rate of 16% p .a. Find the interest earned by the end of 3 years.

please explain the answer.

Answer 1

Answer:

When you deposit money in a bank, the bank usually pays you for the use of your money. When you take out a loan from a bank, you have to pay the bank for the use of their money. In both cases, the money paid is called the interest.

The Simple Interest Formula is given by

Simple Interest = Principal × Interest Rate × Time

I = Prt

where

The Principal (P) is the amount of money deposited or borrowed.

The Interest Rate (r) is a percent of the principal earned or paid.

The Time (t) is the length of time the money is deposited or borrowed.

Step-by-step explanation:

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