Question

Your grandmother gives you $100 for your birthday. You deposit it into your savings account and save it for 12 months. If the bank pays 0.5% interest per month, how much money will you have at the end of 12 months? (note: do not include currency signs or commas in your answer; round your answer to two decimal places).

Answer 1

Answer:

$106.17

Explanation:

Data provided in the question:

Amount received i.e the Principle amount = $100

Time for which money is kept in savings account, n = 12 months

Interest paid per month by the bank , r = 0.5% monthly

Now,

Future value = principle × ( 1 + r )ⁿ

or

Future value = $100 × ( 1 + 0.005 )¹²

or

Future value = $106.17