l How much is 1000 worth after 12 Monthlys using an annual interest rate
<-- Start Balance
<-- # of periods
<-- Interest rate
              

Answer
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A = 1,074.42

↓Steps Explained:↓



How much is 1000 worth after 12 months

using an annual interest rate of 7.2%
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  =  0.072
  12

Monthly Interest = 0.006

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 = 1,074.42

A = 1000(1.006)12

A = 1000(1.0744241677219)

How much interest was earned?

Interest Earned = Accum. Value - Start Balance

Plug in our values

Interest Earned = 1,074.42 - 0.00

Interest Earned = 1,074.42

1074.42

Final Answer

A = 1,074.42


Related Calculators:  Rule of 72  |  Effective Annual Yield Rate  |  Approximations of Interest Rate
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