The compound interest on a principal amount of RM1000 for 3 years at an annual interest rate of 6% compounded annually is:
To calculate the compound interest, we can use the formula:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (RM1000 in this case)
r = the annual interest rate (6% or 0.06 decimal)
n = the number of times that interest is compounded per year (in this case, annually)
t = the number of years the money is invested for (3 years in this case)
Plugging in the values, we have:
A = 1000(1 + 0.06/1)^(1*3)
Simplifying, we have:
A = 1000(1 + 0.06)^3
Calculating further:
A = 1000(1.06)^3
A = 1000(1.191016)
A = 1191.016
So, the compound interest on a principal amount of RM1000 for 3 years at an annual interest rate of 6% compounded annually is RM191.016.