Engineering Board Exam Reviewer · Compound Interest · easy

Find the effective interest rate equivalent to 10% compounded annually.

  1. 10%
  2. 10.25%
  3. 9.75%
  4. 11%

Answer

A. 10%

Solution

Since compounding is annual, the effective rate equals the nominal rate: 10%.

More Compound Interest questions

  1. A principal of P10,000 is invested at 6% compounded monthly for 2 years. Find the compound amount.
  2. Find the compound interest on P25,000 at 4% compounded semi-annually for 2 years.
  3. Find the compound amount of P6,000 at 9% compounded annually for 10 years.
  4. Find the compound amount of P10,000 invested at 6% compounded annually for 5 years.
  5. Find the compound interest earned on P20,000 at 5% compounded annually for 3 years.
  6. Find the compound amount of P15,000 at 8% compounded semi-annually for 4 years.
  7. Find the compound amount of P8,000 at 12% compounded quarterly for 3 years.
  8. Find the present value that will amount to P50,000 in 6 years at 7% compounded annually.
  9. Find the number of years for P5,000 to double at 8% compounded annually.

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