How much is 100 worth after 84 Monthlys using an annual interest rate of 3% compounded Monthly?

<-- Start Balance
<-- # of periods
<-- Interest rate
              

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How much is 100 worth after
84 months
using an annual interest rate of 3%
compounded monthly?

Calculate effective interest rate

There are 12 months in a year
Convert interest rate to monthly

Monthly Interest  =	Annual Interest Rate
	Compounding Periods

Monthly Interest  =	0.03
	12

Monthly Interest = 0.0025

Calculate Accumulated Balance

A = B(1 + i)ⁿ
where A = accumulated balance
B = opening balance
i = Monthly interest rate
and n = number of periods

Plugging in our values

A = 100(1 + 0.0025)⁸⁴
A = 100(1.0025)⁸⁴
A = 100(1.2333548005492)
A = 123.34

How much interest was earned?

Interest Earned = Accum. Value - Start Balance

Plug in our values

Interest Earned = 123.34 - 100.00
Interest Earned = 23.34