Answer
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A = 33,003.87
↓Steps Explained:↓
How much is 10000 worth after 120 months
using an annual interest rate of 12%
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 = | 0.12 |
| 12 |
Monthly Interest = 0.01
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 = 33,003.87
A = 10000(1.01)120
A = 10000(3.3003868945737)
How much interest was earned?
Interest Earned = Accum. Value - Start Balance
Plug in our values
Interest Earned = 33,003.87 - 0.00
Interest Earned = 33,003.87
33003.87
Final Answer
A = 33,003.87Take the Quiz Switch to Chat Mode
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