Calculating interest on the principal borrowed as well as any prior interest.
$6,000 for six years at a daily compounded rate is None of these
Annual interest compounding adjective finance. If you borrow $100,000 at 5% interest compounded annually, you would owe $5,250 after the first year on a principal of $105,000. This method involves calculating and adding interest to an investment or loan once a year rather than for a longer period.
The formula to determine how much an investment will grow to over time when it is placed in an account for years during which it generates dollar-compound interest is:
A = P(1 +r/m) m t
The values for each of these variables are provided as follows, presuming that a year has 365 days: m =365 t=6r 8.5% = 0.085The investment's worth is then computed after six years, as illustrated below.
A =991.15
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