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: What would be another way to calculate total interest rather than just adding up the individual interest amounts?

Sagot :

madethisfortwitch1

Answer:

Step-by-step explanation:

At the end of the loan/investment, you can take the accumulated value and subtract that from the principle/PV to get the total interest

The total interest earned can be determined by subtracting the principal from the future value of the loan.

There are two types of interests : simple interest and compound interest.

Compound interest is a type of interest in which the principal and interest already accumulated also earn an interest. While for simple interest it is only the principal that earns interest.

For example, if a loan of $4000 earns 10% interest compounded yearly, the future value of the the amount in 5 years is:

$4000 x (1.1)^5 = 6442.04

The interest earned over the 5 years can be determined by subtracting the  cost of the loan from the future value of the investment

Interest = 6442.04 - $4000 = $2442.04

Another example, if a loan of $4000 earns 10% simple interest, the interest of the loan after 5 years is:

$4000 x 0.1 x 5 = $2000

To learn more about interest, please check: brainly.com/question/9352088?referrer=searchResults

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