Question

Compounding interest means interest accrues
A) at variable rates throughout the term
B) more quickly than simple interest
C) more slowly than simple interest
D) at the same rate as simple interest

Answer 1

hey frnd....
answer is
A) at variable rates throughout the term.

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Answer 2

Answer: at variable rates throughout the term

Explanation:Compound interest refers to the interest which is earned on an investment which is then added to the investment amount . The next interest amount is  then calculated on the original investment  plus the accumulated interest.

Suppose we  borrow Rs 20000 for a period of 3 years and pay 10%  compounding interest . In this case, the compound interest would be calculated as follows :

1st Year: Rs 20000 x 10% = 2000.

2nd Year: Rs 2,2000 x 10% = 2220.

3rd Year: Rs 2,4220 x 10% = 2422.

The total repayment amount after 3 years is Rs 2,6620 and the interest paid would be Rs 6620 .