The consideration given to the bank for providing loan facility, in return of such facility an amount is paid which is over and above the principle amount of loan, this amount can be said as interest.
Interest are of two types i.e. (a) Simple interest (b) compound interest
<h3>simple interest</h3>
The amount of interest which is calculated at a fixed predetermined rate every year on the principle amount and paid until the loan is settled in full.
Given in the Question
Principle is $20,000
Rate is 3%
Time is 1 year
<h3>Calculation</h3>
The simple interest is calculated by multiplying principle with the rate and than the outcome is multiplied with time to find simple interest.

Therefore the amount of interest received by Michael at the end of first year on an amount of $20,000 at a interest rate of 3%will be $600.
Learn more about simple interest here:
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Answer:
The bank will create excess reserve of $200 billion
Explanation:
The question measures the size of credit expansion associated with the new currency deposit. the computation below shows how excess reserves can be computed.
Money multiplier = 1
/Legal Reserve Ratio = 1/0.2 = 5
Excess Reserve Created = A x (1
/Legal Reserve Ratio)
Where: A = New currency deposit = $40
Legal Reserve Ratio = 0.20
Excess Reserve Created = $40 x (1/0.2) = $40 x 5 = $200 billion
The legal reserve of 5 indicates that for every unit of money reserved by banks, they are able to create 5 units of same.
The money creation capability of the banking system as a whole is depends on the legal reserve ratio. Legal reserve ratio is a fraction of a bank deposit which the law requires them to hold. The bank can only lend the balance after deducting the legal reserve.
For the answer to the question above, my answer would be comparison and contrast, as it is explaining the similarities between coal and petroleum.
I hope my answer helped you. Feel free to ask more questions. Have a nice day!
Answer:
Reverse annuity mortgage RAM
Explanation:
Answer:
The correct answer is $21,522.04.
Explanation:
According to the scenario, the given data are as follows:
Present value = $10,000
Rate of interest = 11%
Rate of interest (r) ( compounded monthly) = 11% ÷ 12 = 0.00916
time period = 7 years
Time period ( compounded monthly) (t) = 7 × 12 = 84
So, we can calculate the future value by using following method:
FV = PV × ( 1 + r)^t
By putting the value, we get,
FV = $10,000 × ( 1 + 0.00916)^84
FV = $21,522.04